Correlation Between THAI BEVERAGE and PACCAR

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

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

Diversification Opportunities for THAI BEVERAGE and PACCAR

0.39

Correlation Coefficient

THAI BEVERAGE  PACCAR

Weak diversification

The 3 months correlation between THAI and PACCAR is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and PACCAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACCAR 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 PACCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACCAR Inc has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and PACCAR go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and PACCAR

Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 3.11 times more return on investment than PACCAR. However, THAI BEVERAGE is 3.11 times more volatile than PACCAR Inc. It trades about 0.09 of its potential returns per unit of risk. PACCAR Inc is currently generating about 0.0 per unit of risk. If you would invest  18.00  in THAI BEVERAGE on October 12, 2024 and sell it today you would earn a total of  19.00  from holding THAI BEVERAGE or generate 105.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.47%
Values	Daily Returns

THAI BEVERAGE  vs.  PACCAR Inc

THAI BEVERAGE

Risk-Adjusted Performance

0 of 100

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.

PACCAR Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PACCAR Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PACCAR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with THAI BEVERAGE and PACCAR

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

The idea behind THAI BEVERAGE and PACCAR 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.