Correlation Between THAI BEVERAGE and TRAVEL +

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

By analyzing existing cross correlation between THAI BEVERAGE and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on THAI BEVERAGE and TRAVEL + 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 TRAVEL +. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and TRAVEL +.

Diversification Opportunities for THAI BEVERAGE and TRAVEL +

-0.54

Correlation Coefficient

THAI BEVERAGE  TRAVEL +

Excellent diversification

The 3 months correlation between THAI and TRAVEL is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL 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 TRAVEL +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and TRAVEL + go up and down completely randomly.

Pair Corralation between THAI BEVERAGE and TRAVEL +

Assuming the 90 days trading horizon THAI BEVERAGE is expected to under-perform the TRAVEL +. In addition to that, THAI BEVERAGE is 1.06 times more volatile than TRAVEL LEISURE DL 01. It trades about -0.01 of its total potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.28 per unit of volatility. If you would invest  3,500  in TRAVEL LEISURE DL 01 on April 22, 2025 and sell it today you would earn a total of  1,360  from holding TRAVEL LEISURE DL 01 or generate 38.86% return on investment over 90 days.

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

THAI BEVERAGE  vs.  TRAVEL LEISURE DL 01

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

TRAVEL LEISURE DL

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TRAVEL + reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with THAI BEVERAGE and TRAVEL +

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

The idea behind THAI BEVERAGE and TRAVEL LEISURE DL 01 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.