Correlation Between 3BB INTERNET and Information
Can any of the company-specific risk be diversified away by investing in both 3BB INTERNET and Information 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 3BB INTERNET and Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3BB INTERNET INFRASTRUCTURE and Information and Communication, you can compare the effects of market volatilities on 3BB INTERNET and Information 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 3BB INTERNET with a short position of Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3BB INTERNET and Information.
Diversification Opportunities for 3BB INTERNET and Information
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3BB and Information is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding 3BB INTERNET INFRASTRUCTURE and Information and Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information and Comm and 3BB INTERNET 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 3BB INTERNET INFRASTRUCTURE are associated (or correlated) with Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information and Comm has no effect on the direction of 3BB INTERNET i.e., 3BB INTERNET and Information go up and down completely randomly.
Pair Corralation between 3BB INTERNET and Information
Assuming the 90 days trading horizon 3BB INTERNET INFRASTRUCTURE is expected to generate 0.63 times more return on investment than Information. However, 3BB INTERNET INFRASTRUCTURE is 1.59 times less risky than Information. It trades about -0.02 of its potential returns per unit of risk. Information and Communication is currently generating about -0.03 per unit of risk. If you would invest 651.00 in 3BB INTERNET INFRASTRUCTURE on August 24, 2024 and sell it today you would lose (91.00) from holding 3BB INTERNET INFRASTRUCTURE or give up 13.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
3BB INTERNET INFRASTRUCTURE vs. Information and Communication
Performance |
| Timeline |
| 3BB INTERNET INFRAST |
| Information and Comm |
3BB INTERNET and Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3BB INTERNET and Information
The main advantage of trading using opposite 3BB INTERNET and Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3BB INTERNET position performs unexpectedly, Information 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 Information will offset losses from the drop in Information's long position.| 3BB INTERNET vs. Delta Electronics Public | 3BB INTERNET vs. Delta Electronics Public | 3BB INTERNET vs. Airports of Thailand | 3BB INTERNET vs. Airports of Thailand |
| Information vs. Hana Microelectronics Public | Information vs. Ekachai Medical Care | Information vs. Megachem Public | Information vs. Diamond Building Products |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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