Correlation Between Internet Thailand and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and Scandinavian Tobacco 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 Internet Thailand and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Thailand PCL and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Internet Thailand and Scandinavian Tobacco 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 Internet Thailand with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Scandinavian Tobacco.
Diversification Opportunities for Internet Thailand and Scandinavian Tobacco
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Internet and Scandinavian is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Internet Thailand 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 Internet Thailand PCL are associated (or correlated) with Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of Internet Thailand i.e., Internet Thailand and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Internet Thailand and Scandinavian Tobacco
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 8.17 times more return on investment than Scandinavian Tobacco. However, Internet Thailand is 8.17 times more volatile than Scandinavian Tobacco Group. It trades about 0.04 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.06 per unit of risk. If you would invest 13.00 in Internet Thailand PCL on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Internet Thailand PCL or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand PCL vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Internet Thailand PCL |
| Scandinavian Tobacco |
Internet Thailand and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Scandinavian Tobacco
The main advantage of trading using opposite Internet Thailand and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
| Scandinavian Tobacco vs. Daido Steel Co | Scandinavian Tobacco vs. OFFICE DEPOT | Scandinavian Tobacco vs. MAVEN WIRELESS SWEDEN | Scandinavian Tobacco vs. MITSUBISHI STEEL MFG |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |