Correlation Between Thai Beverage and Gecina SA

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

Diversification Opportunities for Thai Beverage and Gecina SA

-0.38

Correlation Coefficient

Thai Beverage  Gecina SA

Very good diversification

The 3 months correlation between Thai and Gecina is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA 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 Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Thai Beverage i.e., Thai Beverage and Gecina SA go up and down completely randomly.

Pair Corralation between Thai Beverage and Gecina SA

Assuming the 90 days horizon Thai Beverage Public is expected to generate 2.6 times more return on investment than Gecina SA. However, Thai Beverage is 2.6 times more volatile than Gecina SA. It trades about 0.01 of its potential returns per unit of risk. Gecina SA is currently generating about -0.26 per unit of risk. If you would invest  37.00  in Thai Beverage Public on September 28, 2024 and sell it today you would earn a total of  0.00  from holding Thai Beverage Public or generate 0.0% return on investment over 90 days.

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

Thai Beverage Public  vs.  Gecina SA

Thai Beverage Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Beverage Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Gecina SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gecina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Thai Beverage and Gecina SA

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

The idea behind Thai Beverage Public and Gecina SA 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.