Correlation Between THAI BEVERAGE and CAL MAINE
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and CAL MAINE 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 THAI BEVERAGE and CAL MAINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and CAL MAINE FOODS, you can compare the effects of market volatilities on THAI BEVERAGE and CAL MAINE 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 THAI BEVERAGE with a short position of CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and CAL MAINE.
Diversification Opportunities for THAI BEVERAGE and CAL MAINE
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between THAI and CAL is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and CAL MAINE FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAL MAINE FOODS and THAI BEVERAGE 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 THAI BEVERAGE are associated (or correlated) with CAL MAINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAL MAINE FOODS has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and CAL MAINE go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and CAL MAINE
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.59 times more return on investment than CAL MAINE. However, THAI BEVERAGE is 1.69 times less risky than CAL MAINE. It trades about -0.11 of its potential returns per unit of risk. CAL MAINE FOODS is currently generating about -0.3 per unit of risk. If you would invest 35.00 in THAI BEVERAGE on December 11, 2024 and sell it today you would lose (2.00) from holding THAI BEVERAGE or give up 5.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
THAI BEVERAGE vs. CAL MAINE FOODS
Performance |
Timeline |
THAI BEVERAGE |
CAL MAINE FOODS |
THAI BEVERAGE and CAL MAINE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with THAI BEVERAGE and CAL MAINE
The main advantage of trading using opposite THAI BEVERAGE and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, CAL MAINE 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 CAL MAINE will offset losses from the drop in CAL MAINE's long position.THAI BEVERAGE vs. UNIQA INSURANCE GR | THAI BEVERAGE vs. REVO INSURANCE SPA | THAI BEVERAGE vs. Cars Inc | THAI BEVERAGE vs. NORTHEAST UTILITIES |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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