Correlation Between Internet Thailand and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS, you can compare the effects of market volatilities on Internet Thailand and APPLIED MATERIALS 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 APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and APPLIED MATERIALS.
Diversification Opportunities for Internet Thailand and APPLIED MATERIALS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Internet and APPLIED is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS 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 APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of Internet Thailand i.e., Internet Thailand and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Internet Thailand and APPLIED MATERIALS
Assuming the 90 days trading horizon Internet Thailand PCL is expected to under-perform the APPLIED MATERIALS. In addition to that, Internet Thailand is 2.23 times more volatile than APPLIED MATERIALS. It trades about -0.17 of its total potential returns per unit of risk. APPLIED MATERIALS is currently generating about -0.14 per unit of volatility. If you would invest 16,802 in APPLIED MATERIALS on September 25, 2024 and sell it today you would lose (976.00) from holding APPLIED MATERIALS or give up 5.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand PCL vs. APPLIED MATERIALS
Performance |
| Timeline |
| Internet Thailand PCL |
| APPLIED MATERIALS |
Internet Thailand and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and APPLIED MATERIALS
The main advantage of trading using opposite Internet Thailand and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
| APPLIED MATERIALS vs. KRISPY KREME DL 01 | APPLIED MATERIALS vs. Internet Thailand PCL | APPLIED MATERIALS vs. Spirent Communications plc | APPLIED MATERIALS vs. Playa Hotels Resorts |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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