Correlation Between THAI BEVERAGE and KENEDIX OFFICE

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

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

Diversification Opportunities for THAI BEVERAGE and KENEDIX OFFICE

0.08

Correlation Coefficient

THAI BEVERAGE  KENEDIX OFFICE

Significant diversification

The 3 months correlation between THAI and KENEDIX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and KENEDIX OFFICE go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and KENEDIX OFFICE

Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the KENEDIX OFFICE. In addition to that, THAI BEVERAGE is 1.09 times more volatile than KENEDIX OFFICE INV. It trades about -0.03 of its total potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about 0.02 per unit of volatility. If you would invest  88,000  in KENEDIX OFFICE INV on December 20, 2024 and sell it today you would earn a total of  1,000.00  from holding KENEDIX OFFICE INV or generate 1.14% return on investment over 90 days.

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

THAI BEVERAGE  vs.  KENEDIX OFFICE INV

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.

KENEDIX OFFICE INV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KENEDIX OFFICE INV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KENEDIX OFFICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with THAI BEVERAGE and KENEDIX OFFICE

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

The idea behind THAI BEVERAGE and KENEDIX OFFICE INV 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.