Correlation Between Ichitan Group and Royal Plus
Can any of the company-specific risk be diversified away by investing in both Ichitan Group and Royal Plus 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 Ichitan Group and Royal Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichitan Group Public and Royal Plus PCL, you can compare the effects of market volatilities on Ichitan Group and Royal Plus 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 Ichitan Group with a short position of Royal Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichitan Group and Royal Plus.
Diversification Opportunities for Ichitan Group and Royal Plus
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ichitan and Royal is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ichitan Group Public and Royal Plus PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Plus PCL and Ichitan Group 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 Ichitan Group Public are associated (or correlated) with Royal Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Plus PCL has no effect on the direction of Ichitan Group i.e., Ichitan Group and Royal Plus go up and down completely randomly.
Pair Corralation between Ichitan Group and Royal Plus
Assuming the 90 days trading horizon Ichitan Group Public is expected to generate 0.81 times more return on investment than Royal Plus. However, Ichitan Group Public is 1.24 times less risky than Royal Plus. It trades about -0.07 of its potential returns per unit of risk. Royal Plus PCL is currently generating about -0.15 per unit of risk. If you would invest 1,518 in Ichitan Group Public on September 13, 2024 and sell it today you would lose (28.00) from holding Ichitan Group Public or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ichitan Group Public vs. Royal Plus PCL
Performance |
| Timeline |
| Ichitan Group Public |
| Royal Plus PCL |
Ichitan Group and Royal Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichitan Group and Royal Plus
The main advantage of trading using opposite Ichitan Group and Royal Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichitan Group position performs unexpectedly, Royal Plus 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 Royal Plus will offset losses from the drop in Royal Plus' long position.| Ichitan Group vs. Carabao Group Public | Ichitan Group vs. Taokaenoi Food Marketing | Ichitan Group vs. Home Product Center | Ichitan Group vs. Thai Union Group |
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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 the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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