Correlation Between THAI BEVERAGE and United Breweries
Can any of the company-specific risk be diversified away by investing in both THAI BEVERAGE and United Breweries 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 United Breweries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THAI BEVERAGE and United Breweries Co, you can compare the effects of market volatilities on THAI BEVERAGE and United Breweries 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 United Breweries. Check out your portfolio center. Please also check ongoing floating volatility patterns of THAI BEVERAGE and United Breweries.
Diversification Opportunities for THAI BEVERAGE and United Breweries
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between THAI and United is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding THAI BEVERAGE and United Breweries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Breweries 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 are associated (or correlated) with United Breweries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Breweries has no effect on the direction of THAI BEVERAGE i.e., THAI BEVERAGE and United Breweries go up and down completely randomly.
Pair Corralation between THAI BEVERAGE and United Breweries
Assuming the 90 days trading horizon THAI BEVERAGE is expected to generate 0.98 times more return on investment than United Breweries. However, THAI BEVERAGE is 1.02 times less risky than United Breweries. It trades about 0.01 of its potential returns per unit of risk. United Breweries Co is currently generating about -0.06 per unit of risk. If you would invest 31.00 in THAI BEVERAGE on June 9, 2025 and sell it today you would earn a total of 0.00 from holding THAI BEVERAGE or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THAI BEVERAGE vs. United Breweries Co
Performance |
| Timeline |
| THAI BEVERAGE |
| United Breweries |
THAI BEVERAGE and United Breweries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with THAI BEVERAGE and United Breweries
The main advantage of trading using opposite THAI BEVERAGE and United Breweries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THAI BEVERAGE position performs unexpectedly, United Breweries 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 United Breweries will offset losses from the drop in United Breweries' long position.| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Microsoft |
| United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc | United Breweries vs. Apple Inc |
Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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