Correlation Between Hwa Fong and Italian Thai
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and Italian Thai 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 Hwa Fong and Italian Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwa Fong Rubber and Italian Thai Development Public, you can compare the effects of market volatilities on Hwa Fong and Italian Thai 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 Hwa Fong with a short position of Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Italian Thai.
Diversification Opportunities for Hwa Fong and Italian Thai
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hwa and Italian is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop and Hwa Fong 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 Hwa Fong Rubber are associated (or correlated) with Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of Hwa Fong i.e., Hwa Fong and Italian Thai go up and down completely randomly.
Pair Corralation between Hwa Fong and Italian Thai
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 0.43 times more return on investment than Italian Thai. However, Hwa Fong Rubber is 2.33 times less risky than Italian Thai. It trades about -0.14 of its potential returns per unit of risk. Italian Thai Development Public is currently generating about -0.36 per unit of risk. If you would invest 450.00 in Hwa Fong Rubber on August 31, 2024 and sell it today you would lose (20.00) from holding Hwa Fong Rubber or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. Italian Thai Development Publi
Performance |
| Timeline |
| Hwa Fong Rubber |
| Italian Thai Develop |
Hwa Fong and Italian Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and Italian Thai
The main advantage of trading using opposite Hwa Fong and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, Italian Thai 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 Italian Thai will offset losses from the drop in Italian Thai's long position.| Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics Public |
| Italian Thai vs. Gulf Energy Development | Italian Thai vs. Energy Absolute Public | Italian Thai vs. WHA Public | Italian Thai vs. TRC Construction 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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