Correlation Between Saratoga Investment and Thai Beverage
Can any of the company-specific risk be diversified away by investing in both Saratoga Investment 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 Saratoga Investment and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saratoga Investment Corp and Thai Beverage PCL, you can compare the effects of market volatilities on Saratoga Investment 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 Saratoga Investment with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saratoga Investment and Thai Beverage.
Diversification Opportunities for Saratoga Investment and Thai Beverage
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Saratoga and Thai is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Saratoga Investment Corp and Thai Beverage PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage PCL and Saratoga Investment 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 Saratoga Investment Corp 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 PCL has no effect on the direction of Saratoga Investment i.e., Saratoga Investment and Thai Beverage go up and down completely randomly.
Pair Corralation between Saratoga Investment and Thai Beverage
Considering the 90-day investment horizon Saratoga Investment is expected to generate 16.93 times less return on investment than Thai Beverage. But when comparing it to its historical volatility, Saratoga Investment Corp is 13.03 times less risky than Thai Beverage. It trades about 0.16 of its potential returns per unit of risk. Thai Beverage PCL is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,630 in Thai Beverage PCL on January 26, 2024 and sell it today you would earn a total of 1,570 from holding Thai Beverage PCL or generate 43.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saratoga Investment Corp vs. Thai Beverage PCL
Performance |
| Timeline |
| Saratoga Investment Corp |
| Thai Beverage PCL |
Saratoga Investment and Thai Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saratoga Investment and Thai Beverage
The main advantage of trading using opposite Saratoga Investment and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saratoga Investment 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.| Saratoga Investment vs. New Mountain Finance | Saratoga Investment vs. BlackRock TCP Capital | Saratoga Investment vs. Carlyle Secured Lending | Saratoga Investment vs. Sixth Street Specialty |
| Thai Beverage vs. Diageo PLC ADR | Thai Beverage vs. Constellation Brands Class | 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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