Correlation Between Information and 3BB INTERNET
Can any of the company-specific risk be diversified away by investing in both Information 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 Information and 3BB INTERNET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information and Communication and 3BB INTERNET INFRASTRUCTURE, you can compare the effects of market volatilities on Information 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 Information with a short position of 3BB INTERNET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information and 3BB INTERNET.
Diversification Opportunities for Information and 3BB INTERNET
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Information and 3BB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Information and Communication 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 Information 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 Information and Communication 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 Information i.e., Information and 3BB INTERNET go up and down completely randomly.
Pair Corralation between Information and 3BB INTERNET
Assuming the 90 days trading horizon Information and Communication is expected to generate 2.27 times more return on investment than 3BB INTERNET. However, Information is 2.27 times more volatile than 3BB INTERNET INFRASTRUCTURE. It trades about -0.13 of its potential returns per unit of risk. 3BB INTERNET INFRASTRUCTURE is currently generating about -0.39 per unit of risk. If you would invest 229.00 in Information and Communication on August 28, 2024 and sell it today you would lose (15.00) from holding Information and Communication or give up 6.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information and Communication vs. 3BB INTERNET INFRASTRUCTURE
Performance |
| Timeline |
| Information and Comm |
| 3BB INTERNET INFRAST |
Information and 3BB INTERNET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information and 3BB INTERNET
The main advantage of trading using opposite Information and 3BB INTERNET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information 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.| Information vs. Hana Microelectronics Public | Information vs. Ekachai Medical Care | Information vs. Megachem Public | Information vs. Diamond Building Products |
| 3BB INTERNET vs. Kiatnakin Phatra Bank | 3BB INTERNET vs. CENTRAL RETAIL P | 3BB INTERNET vs. Digital Telecommunications Infrastructure | 3BB INTERNET vs. Thai Rubber Latex |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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