Correlation Between Cheche Group and Thai Beverage

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

By analyzing existing cross correlation between Cheche Group Class and Thai Beverage PCL, you can compare the effects of market volatilities on Cheche Group 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 Cheche Group with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and Thai Beverage.

Diversification Opportunities for Cheche Group and Thai Beverage

0.61

Correlation Coefficient

Cheche Group  Thai Beverage

Poor diversification

The 3 months correlation between Cheche and Thai is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class 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 Cheche Group 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 Cheche Group Class 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 Cheche Group i.e., Cheche Group and Thai Beverage go up and down completely randomly.

Pair Corralation between Cheche Group and Thai Beverage

Considering the 90-day investment horizon Cheche Group Class is expected to generate 10.48 times more return on investment than Thai Beverage. However, Cheche Group is 10.48 times more volatile than Thai Beverage PCL. It trades about 0.1 of its potential returns per unit of risk. Thai Beverage PCL is currently generating about 0.13 per unit of risk. If you would invest  79.00  in Cheche Group Class on December 18, 2024 and sell it today you would earn a total of  21.00  from holding Cheche Group Class or generate 26.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Cheche Group Class  vs.  Thai Beverage PCL

Cheche Group Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

Thai Beverage PCL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Beverage PCL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Thai Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cheche Group and Thai Beverage

The main advantage of trading using opposite Cheche Group and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group 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 Cheche Group Class and Thai Beverage PCL 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..