Correlation Between Thai Beverage and FactSet Research

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

Diversification Opportunities for Thai Beverage and FactSet Research

0.0

Correlation Coefficient

Thai Beverage  FactSet Research

Pay attention - limited upside

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

Pair Corralation between Thai Beverage and FactSet Research

If you would invest  42,966  in FactSet Research Systems on September 4, 2024 and sell it today you would earn a total of  5,981  from holding FactSet Research Systems or generate 13.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Thai Beverage PCL  vs.  FactSet Research Systems

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.

FactSet Research Systems

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FactSet Research Systems are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, FactSet Research unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thai Beverage and FactSet Research

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

The idea behind Thai Beverage PCL and FactSet Research Systems 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.