Correlation Between Xiaomi Corp and Thai Beverage

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

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

Diversification Opportunities for Xiaomi Corp and Thai Beverage

-0.25

Correlation Coefficient

Xiaomi Corp  Thai Beverage

Very good diversification

The 3 months correlation between Xiaomi and Thai is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Xiaomi Corp ADR 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 Xiaomi Corp 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 Xiaomi Corp ADR 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 Xiaomi Corp i.e., Xiaomi Corp and Thai Beverage go up and down completely randomly.

Pair Corralation between Xiaomi Corp and Thai Beverage

Assuming the 90 days horizon Xiaomi Corp ADR is expected to generate 0.58 times more return on investment than Thai Beverage. However, Xiaomi Corp ADR is 1.72 times less risky than Thai Beverage. It trades about 0.07 of its potential returns per unit of risk. Thai Beverage Public is currently generating about -0.04 per unit of risk. If you would invest  3,209  in Xiaomi Corp ADR on May 7, 2025 and sell it today you would earn a total of  267.00  from holding Xiaomi Corp ADR or generate 8.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Xiaomi Corp ADR  vs.  Thai Beverage Public

Xiaomi Corp ADR

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Xiaomi Corp ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Xiaomi Corp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 Xiaomi Corp and Thai Beverage

The main advantage of trading using opposite Xiaomi Corp and Thai Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiaomi Corp 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 Xiaomi Corp ADR 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.