Correlation Between Thai Beverage and GCT Semiconductor

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

Diversification Opportunities for Thai Beverage and GCT Semiconductor

0.0

Correlation Coefficient

Thai Beverage  GCT Semiconductor

Pay attention - limited upside

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

Pair Corralation between Thai Beverage and GCT Semiconductor

Assuming the 90 days horizon Thai Beverage PCL is expected to under-perform the GCT Semiconductor. But the pink sheet apears to be less risky and, when comparing its historical volatility, Thai Beverage PCL is 24.17 times less risky than GCT Semiconductor. The pink sheet trades about -0.07 of its potential returns per unit of risk. The GCT Semiconductor Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,049  in GCT Semiconductor Holding on September 30, 2024 and sell it today you would lose (814.00) from holding GCT Semiconductor Holding or give up 77.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.77%
Values	Daily Returns

Thai Beverage PCL  vs.  GCT Semiconductor Holding

Thai Beverage PCL

Risk-Adjusted Performance

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Very Weak

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 current stock price disturbance, may contribute to short-term losses for the investors.

GCT Semiconductor Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GCT Semiconductor Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Thai Beverage and GCT Semiconductor

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

The idea behind Thai Beverage PCL and GCT Semiconductor Holding 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.