Correlation Between Intel and THAI BEVERAGE

Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intel and THAI BEVERAGE, you can compare the effects of market volatilities on Intel 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 Intel with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and THAI BEVERAGE.

Diversification Opportunities for Intel and THAI BEVERAGE

-0.36

Correlation Coefficient

Intel  THAI BEVERAGE

Very good diversification

The 3 months correlation between Intel and THAI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Intel and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Intel 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 Intel 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 has no effect on the direction of Intel i.e., Intel and THAI BEVERAGE go up and down completely randomly.

Pair Corralation between Intel and THAI BEVERAGE

Assuming the 90 days trading horizon Intel is expected to generate 2.55 times less return on investment than THAI BEVERAGE. In addition to that, Intel is 1.19 times more volatile than THAI BEVERAGE. It trades about 0.01 of its total potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.04 per unit of volatility. If you would invest  35.00  in THAI BEVERAGE on October 18, 2024 and sell it today you would earn a total of  2.00  from holding THAI BEVERAGE or generate 5.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intel  vs.  THAI BEVERAGE

Intel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

THAI BEVERAGE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in THAI BEVERAGE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, THAI BEVERAGE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Intel and THAI BEVERAGE

The main advantage of trading using opposite Intel and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.

The idea behind Intel and THAI BEVERAGE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.