Correlation Between Thai Beverage and Summa Silver

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

Diversification Opportunities for Thai Beverage and Summa Silver

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Thai Beverage and Summa Silver

If you would invest  3,367  in Thai Beverage PCL on August 29, 2024 and sell it today you would earn a total of  0.00  from holding Thai Beverage PCL or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Thai Beverage PCL  vs.  Summa Silver Corp

 Performance 
       Timeline  
Thai Beverage PCL 

Risk-Adjusted Performance

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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 latest stock price disturbance, may contribute to short-term losses for the investors.
Summa Silver Corp 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Summa Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Thai Beverage and Summa Silver Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Thai Beverage and Summa Silver

The main advantage of trading using opposite Thai Beverage and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.
The idea behind Thai Beverage PCL and Summa Silver 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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