Correlation Between Fiserv and THAI BEVERAGE

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

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

Diversification Opportunities for Fiserv and THAI BEVERAGE

-0.74

Correlation Coefficient

Fiserv  THAI BEVERAGE

Pay attention - limited upside

The 3 months correlation between Fiserv and THAI is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv Inc and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and Fiserv 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 Fiserv Inc 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 Fiserv i.e., Fiserv and THAI BEVERAGE go up and down completely randomly.

Pair Corralation between Fiserv and THAI BEVERAGE

Assuming the 90 days horizon Fiserv Inc is expected to generate 0.82 times more return on investment than THAI BEVERAGE. However, Fiserv Inc is 1.22 times less risky than THAI BEVERAGE. It trades about 0.16 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about -0.05 per unit of risk. If you would invest  21,060  in Fiserv Inc on December 4, 2024 and sell it today you would earn a total of  1,165  from holding Fiserv Inc or generate 5.53% return on investment over 90 days.

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

Fiserv Inc  vs.  THAI BEVERAGE

Fiserv Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fiserv Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fiserv may actually be approaching a critical reversion point that can send shares even higher in April 2025.

THAI BEVERAGE

Risk-Adjusted Performance

Very Weak

Over the last 90 days THAI BEVERAGE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, THAI BEVERAGE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fiserv and THAI BEVERAGE

The main advantage of trading using opposite Fiserv and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiserv 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 Fiserv Inc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.