Correlation Between Thai Beverage and DOCDATA

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

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

Diversification Opportunities for Thai Beverage and DOCDATA

0.5

Correlation Coefficient

Thai Beverage  DOCDATA

Very weak diversification

The 3 months correlation between Thai and DOCDATA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and DOCDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOCDATA 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 Public are associated (or correlated) with DOCDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOCDATA has no effect on the direction of Thai Beverage i.e., Thai Beverage and DOCDATA go up and down completely randomly.

Pair Corralation between Thai Beverage and DOCDATA

Assuming the 90 days horizon Thai Beverage Public is expected to under-perform the DOCDATA. In addition to that, Thai Beverage is 1.22 times more volatile than DOCDATA. It trades about -0.02 of its total potential returns per unit of risk. DOCDATA is currently generating about -0.02 per unit of volatility. If you would invest  42.00  in DOCDATA on May 15, 2025 and sell it today you would lose (3.00) from holding DOCDATA or give up 7.14% of portfolio value over 90 days.

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

Thai Beverage Public  vs.  DOCDATA

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 nearly stable basic indicators, Thai Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

DOCDATA

Risk-Adjusted Performance

Weakest

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

Pair Trading with Thai Beverage and DOCDATA

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

The idea behind Thai Beverage Public and DOCDATA 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .