Correlation Between THAI BEVERAGE and Sixt SE

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

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

Diversification Opportunities for THAI BEVERAGE and Sixt SE

-0.37

Correlation Coefficient

THAI BEVERAGE  Sixt SE

Very good diversification

The 3 months correlation between THAI and Sixt is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE 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 Sixt SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt SE has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Sixt SE go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and Sixt SE

Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the Sixt SE. In addition to that, THAI BEVERAGE is 1.21 times more volatile than Sixt SE. It trades about -0.03 of its total potential returns per unit of risk. Sixt SE is currently generating about 0.06 per unit of volatility. If you would invest  7,765  in Sixt SE on December 27, 2024 and sell it today you would earn a total of  470.00  from holding Sixt SE or generate 6.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

THAI BEVERAGE  vs.  Sixt SE

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.

Sixt SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Sixt SE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with THAI BEVERAGE and Sixt SE

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

The idea behind THAI BEVERAGE and Sixt SE 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.