Correlation Between Thai Beverage and Ryman Hospitality

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

Diversification Opportunities for Thai Beverage and Ryman Hospitality

0.0

Correlation Coefficient

Thai Beverage  Ryman Hospitality

Pay attention - limited upside

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

Pair Corralation between Thai Beverage and Ryman Hospitality

If you would invest  9,998  in Ryman Hospitality Properties on September 16, 2024 and sell it today you would earn a total of  1,326  from holding Ryman Hospitality Properties or generate 13.26% return on investment over 90 days.

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

Thai Beverage PCL  vs.  Ryman Hospitality Properties

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.

Ryman Hospitality

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryman Hospitality Properties are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical indicators, Ryman Hospitality reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thai Beverage and Ryman Hospitality

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

The idea behind Thai Beverage PCL and Ryman Hospitality Properties 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.