Correlation Between Thai Beverage and Graphjet Technology

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

Diversification Opportunities for Thai Beverage and Graphjet Technology

0.0

Correlation Coefficient

Thai Beverage  Graphjet Technology

Pay attention - limited upside

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

Pair Corralation between Thai Beverage and Graphjet Technology

Assuming the 90 days horizon Thai Beverage PCL is expected to under-perform the Graphjet Technology. But the pink sheet apears to be less risky and, when comparing its historical volatility, Thai Beverage PCL is 8.47 times less risky than Graphjet Technology. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Graphjet Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,045  in Graphjet Technology on October 11, 2024 and sell it today you would lose (1,000.00) from holding Graphjet Technology or give up 95.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	80.16%
Values	Daily Returns

Thai Beverage PCL  vs.  Graphjet Technology

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.

Graphjet Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graphjet Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Graphjet Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thai Beverage and Graphjet Technology

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

The idea behind Thai Beverage PCL and Graphjet Technology 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.