Correlation Between Thai Beverage and Globalink Investment

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

Diversification Opportunities for Thai Beverage and Globalink Investment

0.0

Correlation Coefficient

Thai Beverage  Globalink Investment

Pay attention - limited upside

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

Pair Corralation between Thai Beverage and Globalink Investment

Assuming the 90 days horizon Thai Beverage PCL is expected to under-perform the Globalink Investment. But the pink sheet apears to be less risky and, when comparing its historical volatility, Thai Beverage PCL is 1.23 times less risky than Globalink Investment. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Globalink Investment Unit is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,022  in Globalink Investment Unit on September 20, 2024 and sell it today you would earn a total of  170.00  from holding Globalink Investment Unit or generate 16.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	60.2%
Values	Daily Returns

Thai Beverage PCL  vs.  Globalink Investment Unit

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 current stock price disturbance, may contribute to short-term losses for the investors.

Globalink Investment Unit

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globalink Investment Unit are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Globalink Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Thai Beverage and Globalink Investment

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

The idea behind Thai Beverage PCL and Globalink Investment Unit 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.