Correlation Between Thai Beverage and GRUPO CARSO

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

By analyzing existing cross correlation between Thai Beverage Public and GRUPO CARSO A1, you can compare the effects of market volatilities on Thai Beverage and GRUPO CARSO 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 GRUPO CARSO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and GRUPO CARSO.

Diversification Opportunities for Thai Beverage and GRUPO CARSO

0.33

Correlation Coefficient

Thai Beverage  GRUPO CARSO

Weak diversification

The 3 months correlation between Thai and GRUPO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 Public are associated (or correlated) with GRUPO CARSO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of Thai Beverage i.e., Thai Beverage and GRUPO CARSO go up and down completely randomly.

Pair Corralation between Thai Beverage and GRUPO CARSO

Assuming the 90 days horizon Thai Beverage Public is expected to generate 0.6 times more return on investment than GRUPO CARSO. However, Thai Beverage Public is 1.67 times less risky than GRUPO CARSO. It trades about 0.1 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.01 per unit of risk. If you would invest  36.00  in Thai Beverage Public on September 24, 2024 and sell it today you would earn a total of  2.00  from holding Thai Beverage Public or generate 5.56% 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 Public  vs.  GRUPO CARSO A1

Thai Beverage Public

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Beverage Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Thai Beverage may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GRUPO CARSO A1

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRUPO CARSO A1 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GRUPO CARSO may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Thai Beverage and GRUPO CARSO

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

The idea behind Thai Beverage Public and GRUPO CARSO A1 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.