Correlation Between British Land and Thai Beverage

Can any of the company-specific risk be diversified away by investing in both British Land 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 British Land and Thai Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between British Land and Thai Beverage Public, you can compare the effects of market volatilities on British Land 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 British Land with a short position of Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Land and Thai Beverage.

Diversification Opportunities for British Land and Thai Beverage

0.12

Correlation Coefficient

British Land  Thai Beverage

Average diversification

The 3 months correlation between British and Thai is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding British Land and Thai Beverage Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage Public and British Land 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 British Land 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 Public has no effect on the direction of British Land i.e., British Land and Thai Beverage go up and down completely randomly.

Pair Corralation between British Land and Thai Beverage

Assuming the 90 days horizon British Land is expected to under-perform the Thai Beverage. But the pink sheet apears to be less risky and, when comparing its historical volatility, British Land is 2.49 times less risky than Thai Beverage. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Thai Beverage Public is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Thai Beverage Public on May 7, 2025 and sell it today you would lose (5.00) from holding Thai Beverage Public or give up 12.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

British Land  vs.  Thai Beverage Public

British Land

Risk-Adjusted Performance

Weakest

Over the last 90 days British Land has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Thai Beverage Public

Risk-Adjusted Performance

Weakest

Over the last 90 days Thai Beverage Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with British Land and Thai Beverage

The main advantage of trading using opposite British Land and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Land 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 British Land and Thai Beverage Public 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.