Correlation Between Thai Beverage and Ross Stores

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

Diversification Opportunities for Thai Beverage and Ross Stores

-0.86

Correlation Coefficient

Thai Beverage  Ross Stores

Pay attention - limited upside

The 3 months correlation between Thai and Ross is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage PCL and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Thai Beverage i.e., Thai Beverage and Ross Stores go up and down completely randomly.

Pair Corralation between Thai Beverage and Ross Stores

Assuming the 90 days horizon Thai Beverage PCL is expected to generate 0.38 times more return on investment than Ross Stores. However, Thai Beverage PCL is 2.64 times less risky than Ross Stores. It trades about 0.13 of its potential returns per unit of risk. Ross Stores is currently generating about -0.2 per unit of risk. If you would invest  3,231  in Thai Beverage PCL on December 27, 2024 and sell it today you would earn a total of  136.00  from holding Thai Beverage PCL or generate 4.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Thai Beverage PCL  vs.  Ross Stores

Thai Beverage PCL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thai Beverage PCL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. 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.

Ross Stores

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ross Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Thai Beverage and Ross Stores

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

The idea behind Thai Beverage PCL and Ross Stores 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 Stocks Directory module to find actively traded stocks across global markets.