Correlation Between THAI BEVERAGE and NVIDIA

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

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

Diversification Opportunities for THAI BEVERAGE and NVIDIA

0.35

Correlation Coefficient

THAI BEVERAGE  NVIDIA

Weak diversification

The 3 months correlation between THAI and NVIDIA is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and NVIDIA go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and NVIDIA

Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.54 times more return on investment than NVIDIA. However, THAI BEVERAGE is 1.85 times less risky than NVIDIA. It trades about -0.03 of its potential returns per unit of risk. NVIDIA is currently generating about -0.06 per unit of risk. If you would invest  37.00  in THAI BEVERAGE on December 21, 2024 and sell it today you would lose (2.00) from holding THAI BEVERAGE or give up 5.41% of portfolio value over 90 days.

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

THAI BEVERAGE  vs.  NVIDIA

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

NVIDIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with THAI BEVERAGE and NVIDIA

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

The idea behind THAI BEVERAGE and NVIDIA 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 Global Correlations module to find global opportunities by holding instruments from different markets.