Correlation Between Thai Beverage and Bt Brands

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

Diversification Opportunities for Thai Beverage and Bt Brands

0.0

Correlation Coefficient

Thai Beverage  Bt Brands

Pay attention - limited upside

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

Pair Corralation between Thai Beverage and Bt Brands

If you would invest  163.00  in Bt Brands on September 16, 2024 and sell it today you would lose (3.00) from holding Bt Brands or give up 1.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Thai Beverage PCL  vs.  Bt Brands

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.

Bt Brands

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Bt Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Bt Brands is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Thai Beverage and Bt Brands

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

The idea behind Thai Beverage PCL and Bt Brands 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.