Correlation Between THAI BEVERAGE and Teradata Corp

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

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

Diversification Opportunities for THAI BEVERAGE and Teradata Corp

-0.07

Correlation Coefficient

THAI BEVERAGE  Teradata Corp

Good diversification

The 3 months correlation between THAI and Teradata is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp 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 are associated (or correlated) with Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and Teradata Corp go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and Teradata Corp

Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the Teradata Corp. In addition to that, THAI BEVERAGE is 1.1 times more volatile than Teradata Corp. It trades about -0.04 of its total potential returns per unit of risk. Teradata Corp is currently generating about -0.02 per unit of volatility. If you would invest  1,890  in Teradata Corp on April 25, 2025 and sell it today you would lose (60.00) from holding Teradata Corp or give up 3.17% of portfolio value over 90 days.

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

THAI BEVERAGE  vs.  Teradata Corp

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Teradata Corp

Risk-Adjusted Performance

Weak

Over the last 90 days Teradata Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Teradata Corp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with THAI BEVERAGE and Teradata Corp

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

The idea behind THAI BEVERAGE and Teradata Corp 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.