Correlation Between ALT Telecom and Land
Can any of the company-specific risk be diversified away by investing in both ALT Telecom and Land 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 Land 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 Land and Houses, you can compare the effects of market volatilities on ALT Telecom and Land 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 Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALT Telecom and Land.
Diversification Opportunities for ALT Telecom and Land
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ALT and Land is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding ALT Telecom Public and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses 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 Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of ALT Telecom i.e., ALT Telecom and Land go up and down completely randomly.
Pair Corralation between ALT Telecom and Land
Assuming the 90 days trading horizon ALT Telecom Public is expected to under-perform the Land. In addition to that, ALT Telecom is 1.03 times more volatile than Land and Houses. It trades about -0.05 of its total potential returns per unit of risk. Land and Houses is currently generating about 0.01 per unit of volatility. If you would invest 515.00 in Land and Houses on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Land and Houses or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALT Telecom Public vs. Land and Houses
Performance |
| Timeline |
| ALT Telecom Public |
| Land and Houses |
ALT Telecom and Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALT Telecom and Land
The main advantage of trading using opposite ALT Telecom and Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALT Telecom position performs unexpectedly, Land 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 Land will offset losses from the drop in Land's long position.| ALT Telecom vs. Land and Houses | ALT Telecom vs. Delta Electronics Public | ALT Telecom vs. The Siam Cement | ALT Telecom vs. Bangkok Bank Public |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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