Correlation Between GOLD ROAD and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD and Thai Beverage at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GOLD ROAD and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and Thai Beverage Public, you can compare the effects of market volatilities on GOLD ROAD and Thai Beverage and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GOLD ROAD with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Thai Beverage.
Diversification Opportunities for GOLD ROAD and Thai Beverage
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOLD and Thai is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public and GOLD ROAD is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GOLD ROAD RES are associated (or correlated) with Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage Public has no effect on the direction of GOLD ROAD i.e., GOLD ROAD and Thai Beverage go up and down completely randomly.
Pair Corralation between GOLD ROAD and Thai Beverage
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.91 times more return on investment than Thai Beverage. However, GOLD ROAD RES is 1.09 times less risky than Thai Beverage. It trades about 0.19 of its potential returns per unit of risk. Thai Beverage Public is currently generating about -0.03 per unit of risk. If you would invest 121.00 in GOLD ROAD RES on December 27, 2024 and sell it today you would earn a total of 43.00 from holding GOLD ROAD RES or generate 35.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GOLD ROAD RES vs. Thai Beverage Public
Performance |
Timeline |
GOLD ROAD RES |
Thai Beverage Public |
GOLD ROAD and Thai Beverage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GOLD ROAD and Thai Beverage
The main advantage of trading using opposite GOLD ROAD and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD position performs unexpectedly, Thai Beverage can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Thai Beverage will offset losses from the drop in Thai Beverage's long position.GOLD ROAD vs. De Grey Mining | GOLD ROAD vs. Zijin Mining Group | GOLD ROAD vs. ALBIS LEASING AG | GOLD ROAD vs. Ares Management Corp |
Thai Beverage vs. Diageo plc | Thai Beverage vs. Pernod Ricard SA | Thai Beverage vs. Constellation Brands | Thai Beverage vs. Brown Forman |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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