Correlation Between PEPKOR and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both PEPKOR 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 PEPKOR and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PEPKOR LTD and THAI BEVERAGE, you can compare the effects of market volatilities on PEPKOR 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 PEPKOR with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEPKOR and THAI BEVERAGE.
Diversification Opportunities for PEPKOR and THAI BEVERAGE
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PEPKOR and THAI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PEPKOR LTD and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and PEPKOR 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 PEPKOR LTD 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 PEPKOR i.e., PEPKOR and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between PEPKOR and THAI BEVERAGE
Assuming the 90 days trading horizon PEPKOR LTD is expected to generate 1.17 times more return on investment than THAI BEVERAGE. However, PEPKOR is 1.17 times more volatile than THAI BEVERAGE. It trades about 0.07 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.05 per unit of risk. If you would invest 31.00 in PEPKOR LTD on October 23, 2024 and sell it today you would earn a total of 102.00 from holding PEPKOR LTD or generate 329.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
PEPKOR LTD vs. THAI BEVERAGE
Performance |
Timeline |
PEPKOR LTD |
THAI BEVERAGE |
PEPKOR and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PEPKOR and THAI BEVERAGE
The main advantage of trading using opposite PEPKOR and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PEPKOR 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.PEPKOR vs. FIREWEED METALS P | PEPKOR vs. Yuexiu Transport Infrastructure | PEPKOR vs. Westinghouse Air Brake | PEPKOR vs. Delta Air Lines |
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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 Stocks Directory module to find actively traded stocks across global markets.
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