Correlation Between ALT Telecom and 3BB INTERNET
Can any of the company-specific risk be diversified away by investing in both ALT Telecom and 3BB INTERNET 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 ALT Telecom and 3BB INTERNET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALT Telecom Public and 3BB INTERNET INFRASTRUCTURE, you can compare the effects of market volatilities on ALT Telecom and 3BB INTERNET 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 ALT Telecom with a short position of 3BB INTERNET. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALT Telecom and 3BB INTERNET.
Diversification Opportunities for ALT Telecom and 3BB INTERNET
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ALT and 3BB is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ALT Telecom Public and 3BB INTERNET INFRASTRUCTURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3BB INTERNET INFRAST and ALT Telecom 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 ALT Telecom Public are associated (or correlated) with 3BB INTERNET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3BB INTERNET INFRAST has no effect on the direction of ALT Telecom i.e., ALT Telecom and 3BB INTERNET go up and down completely randomly.
Pair Corralation between ALT Telecom and 3BB INTERNET
Assuming the 90 days trading horizon ALT Telecom Public is expected to generate 1.36 times more return on investment than 3BB INTERNET. However, ALT Telecom is 1.36 times more volatile than 3BB INTERNET INFRASTRUCTURE. It trades about 0.01 of its potential returns per unit of risk. 3BB INTERNET INFRASTRUCTURE is currently generating about -0.26 per unit of risk. If you would invest 110.00 in ALT Telecom Public on September 12, 2024 and sell it today you would earn a total of 0.00 from holding ALT Telecom Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALT Telecom Public vs. 3BB INTERNET INFRASTRUCTURE
Performance |
| Timeline |
| ALT Telecom Public |
| 3BB INTERNET INFRAST |
ALT Telecom and 3BB INTERNET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALT Telecom and 3BB INTERNET
The main advantage of trading using opposite ALT Telecom and 3BB INTERNET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALT Telecom position performs unexpectedly, 3BB INTERNET 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 3BB INTERNET will offset losses from the drop in 3BB INTERNET's long position.| ALT Telecom vs. KCE Electronics Public | ALT Telecom vs. Land and Houses | ALT Telecom vs. Delta Electronics Public | ALT Telecom vs. The Siam Cement |
| 3BB INTERNET vs. Delta Electronics Public | 3BB INTERNET vs. Delta Electronics Public | 3BB INTERNET vs. Airports of Thailand | 3BB INTERNET vs. Airports of Thailand |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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