Correlation Between Compugroup Medical and THAI BEVERAGE

Can any of the company-specific risk be diversified away by investing in both Compugroup Medical 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 Compugroup Medical and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Compugroup Medical SE and THAI BEVERAGE, you can compare the effects of market volatilities on Compugroup Medical 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 Compugroup Medical with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compugroup Medical and THAI BEVERAGE.

Diversification Opportunities for Compugroup Medical and THAI BEVERAGE

0.5

Correlation Coefficient

Compugroup Medical  THAI BEVERAGE

Very weak diversification

The 3 months correlation between Compugroup and THAI is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Compugroup Medical SE and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Compugroup Medical 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 Compugroup Medical SE 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 Compugroup Medical i.e., Compugroup Medical and THAI BEVERAGE go up and down completely randomly.

Pair Corralation between Compugroup Medical and THAI BEVERAGE

Assuming the 90 days horizon Compugroup Medical SE is expected to under-perform the THAI BEVERAGE. But the stock apears to be less risky and, when comparing its historical volatility, Compugroup Medical SE is 1.62 times less risky than THAI BEVERAGE. The stock trades about -0.01 of its potential returns per unit of risk. The THAI BEVERAGE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  14.00  in THAI BEVERAGE on September 28, 2024 and sell it today you would earn a total of  23.00  from holding THAI BEVERAGE or generate 164.29% return on investment over 90 days.

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

Compugroup Medical SE  vs.  THAI BEVERAGE

Compugroup Medical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Compugroup Medical SE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Compugroup Medical reported solid returns over the last few months and may actually be approaching a breakup point.

THAI BEVERAGE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in THAI BEVERAGE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, THAI BEVERAGE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Compugroup Medical and THAI BEVERAGE

The main advantage of trading using opposite Compugroup Medical and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compugroup Medical 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 Compugroup Medical SE and THAI BEVERAGE 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.