Correlation Between Thai Beverage and Becle SA

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

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

Diversification Opportunities for Thai Beverage and Becle SA

0.0

Correlation Coefficient

Thai Beverage  Becle SA

Pay attention - limited upside

The 3 months correlation between Thai and Becle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage PCL and Becle SA de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becle SA de 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 PCL are associated (or correlated) with Becle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becle SA de has no effect on the direction of Thai Beverage i.e., Thai Beverage and Becle SA go up and down completely randomly.

Pair Corralation between Thai Beverage and Becle SA

Assuming the 90 days horizon Thai Beverage PCL is expected to generate 0.4 times more return on investment than Becle SA. However, Thai Beverage PCL is 2.52 times less risky than Becle SA. It trades about -0.04 of its potential returns per unit of risk. Becle SA de is currently generating about -0.02 per unit of risk. If you would invest  3,812  in Thai Beverage PCL on September 4, 2024 and sell it today you would lose (445.00) from holding Thai Beverage PCL or give up 11.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	59.51%
Values	Daily Returns

Thai Beverage PCL  vs.  Becle SA de

Thai Beverage PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Beverage PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Thai Beverage is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Becle SA de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Becle SA de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential 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 Becle SA

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

The idea behind Thai Beverage PCL and Becle SA de 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.