Correlation Between THAI BEVERAGE and Semperit Aktiengesellscha

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

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

Diversification Opportunities for THAI BEVERAGE and Semperit Aktiengesellscha

0.39

Correlation Coefficient

THAI BEVERAGE  Semperit Aktiengesellscha

Weak diversification

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

Pair Corralation between THAI BEVERAGE and Semperit Aktiengesellscha

Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the Semperit Aktiengesellscha. In addition to that, THAI BEVERAGE is 1.46 times more volatile than Semperit Aktiengesellschaft Holding. It trades about -0.19 of its total potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.33 per unit of volatility. If you would invest  1,166  in Semperit Aktiengesellschaft Holding on October 12, 2024 and sell it today you would earn a total of  72.00  from holding Semperit Aktiengesellschaft Holding or generate 6.17% return on investment over 90 days.

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

THAI BEVERAGE  vs.  Semperit Aktiengesellschaft Ho

THAI BEVERAGE

Risk-Adjusted Performance

0 of 100

Insignificant

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.

Semperit Aktiengesellscha

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Semperit Aktiengesellscha may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with THAI BEVERAGE and Semperit Aktiengesellscha

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

The idea behind THAI BEVERAGE and Semperit Aktiengesellschaft Holding 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.