Correlation Between Thai Beverage and Atai Life

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

Diversification Opportunities for Thai Beverage and Atai Life

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between TBVPF and Atai Life is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Atai Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atai Life Sciences 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 Atai Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atai Life Sciences has no effect on the direction of Thai Beverage i.e., Thai Beverage and Atai Life go up and down completely randomly.

Pair Corralation between Thai Beverage and Atai Life

Assuming the 90 days horizon Thai Beverage Public is expected to generate 6.06 times more return on investment than Atai Life. However, Thai Beverage is 6.06 times more volatile than Atai Life Sciences. It trades about 0.08 of its potential returns per unit of risk. Atai Life Sciences is currently generating about -0.08 per unit of risk. If you would invest  49.00  in Thai Beverage Public on August 28, 2022 and sell it today you would lose (5.00)  from holding Thai Beverage Public or give up 10.2% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy83.52%
ValuesDaily Returns

Thai Beverage Public  vs.  Atai Life Sciences

 Performance (%) 
       Timeline  
Thai Beverage Public 
TBVPF Performance
0 of 100
Over the last 90 days Thai Beverage Public has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Thai Beverage is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

TBVPF Price Channel

Atai Life Sciences 
Atai Life Performance
0 of 100
Over the last 90 days Atai Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Atai Life Price Channel

Thai Beverage and Atai Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Thai Beverage and Atai Life

The main advantage of trading using opposite Thai Beverage and Atai Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Atai Life 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 Atai Life will offset losses from the drop in Atai Life's long position.
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The idea behind Thai Beverage Public and Atai Life Sciences 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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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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