Correlation Between Thai Beverage and BEIJJINGNENG CLERGHYC1

Can any of the company-specific risk be diversified away by investing in both Thai Beverage and BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thai Beverage Public and BEIJJINGNENG CLERGHYC1, you can compare the effects of market volatilities on Thai Beverage and BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and BEIJJINGNENG CLERGHYC1.

Diversification Opportunities for Thai Beverage and BEIJJINGNENG CLERGHYC1

0.1

Correlation Coefficient

Thai Beverage  BEIJJINGNENG CLERGHYC1

Average diversification

The 3 months correlation between Thai and BEIJJINGNENG is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and BEIJJINGNENG CLERGHYC1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEIJJINGNENG CLERGHYC1 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 Public are associated (or correlated) with BEIJJINGNENG CLERGHYC1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEIJJINGNENG CLERGHYC1 has no effect on the direction of Thai Beverage i.e., Thai Beverage and BEIJJINGNENG CLERGHYC1 go up and down completely randomly.

Pair Corralation between Thai Beverage and BEIJJINGNENG CLERGHYC1

Assuming the 90 days horizon Thai Beverage is expected to generate 20.24 times less return on investment than BEIJJINGNENG CLERGHYC1. In addition to that, Thai Beverage is 1.2 times more volatile than BEIJJINGNENG CLERGHYC1. It trades about 0.0 of its total potential returns per unit of risk. BEIJJINGNENG CLERGHYC1 is currently generating about 0.04 per unit of volatility. If you would invest  23.00  in BEIJJINGNENG CLERGHYC1 on December 30, 2024 and sell it today you would earn a total of  1.00  from holding BEIJJINGNENG CLERGHYC1 or generate 4.35% return on investment over 90 days.

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

Thai Beverage Public  vs.  BEIJJINGNENG CLERGHYC1

Thai Beverage Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Beverage Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Thai Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BEIJJINGNENG CLERGHYC1

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BEIJJINGNENG CLERGHYC1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, BEIJJINGNENG CLERGHYC1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Thai Beverage and BEIJJINGNENG CLERGHYC1

The main advantage of trading using opposite Thai Beverage and BEIJJINGNENG CLERGHYC1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, BEIJJINGNENG CLERGHYC1 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 BEIJJINGNENG CLERGHYC1 will offset losses from the drop in BEIJJINGNENG CLERGHYC1's long position.

The idea behind Thai Beverage Public and BEIJJINGNENG CLERGHYC1 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.