Correlation Between State Bank and THAI BEVERAGE

Can any of the company-specific risk be diversified away by investing in both State Bank and THAI BEVERAGE 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 State Bank and THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between State Bank of and THAI BEVERAGE, you can compare the effects of market volatilities on State Bank and THAI BEVERAGE 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 State Bank with a short position of THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and THAI BEVERAGE.

Diversification Opportunities for State Bank and THAI BEVERAGE

-0.01

Correlation Coefficient

State Bank  THAI BEVERAGE

Good diversification

The 3 months correlation between State and THAI is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE and State Bank 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 State Bank of are associated (or correlated) with THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of State Bank i.e., State Bank and THAI BEVERAGE go up and down completely randomly.

Pair Corralation between State Bank and THAI BEVERAGE

Assuming the 90 days horizon State Bank of is expected to generate 0.79 times more return on investment than THAI BEVERAGE. However, State Bank of is 1.27 times less risky than THAI BEVERAGE. It trades about 0.04 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about -0.01 per unit of risk. If you would invest  7,995  in State Bank of on April 20, 2025 and sell it today you would earn a total of  305.00  from holding State Bank of or generate 3.81% return on investment over 90 days.

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

State Bank of  vs.  THAI BEVERAGE

State Bank

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in State Bank of are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, State Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

THAI BEVERAGE

Risk-Adjusted Performance

Very Weak

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

Pair Trading with State Bank and THAI BEVERAGE

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

The idea behind State Bank of and THAI BEVERAGE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.