Correlation Between THAI BEVERAGE and CSX

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

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

Diversification Opportunities for THAI BEVERAGE and CSX

0.57

Correlation Coefficient

THAI BEVERAGE  CSX

Very weak diversification

The 3 months correlation between THAI and CSX is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and CSX Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX Corporation 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 CSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX Corporation has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and CSX go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and CSX

Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the CSX. In addition to that, THAI BEVERAGE is 1.48 times more volatile than CSX Corporation. It trades about -0.09 of its total potential returns per unit of risk. CSX Corporation is currently generating about -0.13 per unit of volatility. If you would invest  3,104  in CSX Corporation on December 11, 2024 and sell it today you would lose (234.00) from holding CSX Corporation or give up 7.54% of portfolio value over 90 days.

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

THAI BEVERAGE  vs.  CSX Corp.

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 uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CSX Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSX Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with THAI BEVERAGE and CSX

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

The idea behind THAI BEVERAGE and CSX Corporation 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.