Correlation Between THAI BEVERAGE and Apple

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

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

Diversification Opportunities for THAI BEVERAGE and Apple

0.67

Correlation Coefficient

THAI BEVERAGE  Apple

Poor diversification

The 3 months correlation between THAI and Apple is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Apple go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and Apple

Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 3.49 times less return on investment than Apple. In addition to that, THAI BEVERAGE is 2.91 times more volatile than Apple Inc. It trades about 0.07 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.68 per unit of volatility. If you would invest  21,890  in Apple Inc on September 26, 2024 and sell it today you would earn a total of  2,610  from holding Apple Inc or generate 11.92% return on investment over 90 days.

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

THAI BEVERAGE  vs.  Apple Inc

THAI BEVERAGE

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in THAI BEVERAGE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, THAI BEVERAGE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Apple Inc

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Apple unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with THAI BEVERAGE and Apple

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

The idea behind THAI BEVERAGE and Apple Inc 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.