Correlation Between Thai Beverage and GREEN MINERALS

Can any of the company-specific risk be diversified away by investing in both Thai Beverage and GREEN MINERALS 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 GREEN MINERALS 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 GREEN MINERALS NK, you can compare the effects of market volatilities on Thai Beverage and GREEN MINERALS 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 GREEN MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and GREEN MINERALS.

Diversification Opportunities for Thai Beverage and GREEN MINERALS

0.59

Correlation Coefficient

Thai Beverage  GREEN MINERALS

Very weak diversification

The 3 months correlation between Thai and GREEN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and GREEN MINERALS NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREEN MINERALS NK 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 GREEN MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREEN MINERALS NK has no effect on the direction of Thai Beverage i.e., Thai Beverage and GREEN MINERALS go up and down completely randomly.

Pair Corralation between Thai Beverage and GREEN MINERALS

Assuming the 90 days horizon Thai Beverage Public is expected to under-perform the GREEN MINERALS. But the stock apears to be less risky and, when comparing its historical volatility, Thai Beverage Public is 2.92 times less risky than GREEN MINERALS. The stock trades about -0.01 of its potential returns per unit of risk. The GREEN MINERALS NK is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  29.00  in GREEN MINERALS NK on December 19, 2024 and sell it today you would lose (5.00) from holding GREEN MINERALS NK or give up 17.24% of portfolio value over 90 days.

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

Thai Beverage Public  vs.  GREEN MINERALS NK

Thai Beverage Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Beverage Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Thai Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GREEN MINERALS NK

Risk-Adjusted Performance

Very Weak

Over the last 90 days GREEN MINERALS NK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GREEN MINERALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Thai Beverage and GREEN MINERALS

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

The idea behind Thai Beverage Public and GREEN MINERALS NK 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.