Correlation Between Thai Beverage and Walt Disney

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

Diversification Opportunities for Thai Beverage and Walt Disney

ThaiWaltDiversified AwayThaiWaltDiversified Away100%
0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Thai and Walt is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and The Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Walt Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Thai Beverage i.e., Thai Beverage and Walt Disney go up and down completely randomly.

Pair Corralation between Thai Beverage and Walt Disney

Assuming the 90 days horizon Thai Beverage is expected to generate 2.12 times less return on investment than Walt Disney. In addition to that, Thai Beverage is 2.09 times more volatile than The Walt Disney. It trades about 0.04 of its total potential returns per unit of risk. The Walt Disney is currently generating about 0.2 per unit of volatility. If you would invest  8,804  in The Walt Disney on October 26, 2024 and sell it today you would earn a total of  1,768  from holding The Walt Disney or generate 20.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.33%
ValuesDaily Returns

Thai Beverage Public  vs.  The Walt Disney

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510152025
JavaScript chart by amCharts 3.21.15T6W WDP
       Timeline  
Thai Beverage Public 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
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 February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.340.350.360.370.380.390.40.41
Walt Disney 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in The Walt Disney are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Walt Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9095100105110

Thai Beverage and Walt Disney Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.14-7.6-5.05-2.50.04242.55.087.6610.2412.82 0.050.100.15
JavaScript chart by amCharts 3.21.15T6W WDP
       Returns  

Pair Trading with Thai Beverage and Walt Disney

The main advantage of trading using opposite Thai Beverage and Walt Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Walt Disney 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 Walt Disney will offset losses from the drop in Walt Disney's long position.
The idea behind Thai Beverage Public and The Walt Disney 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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