Correlation Between Internet Thailand and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and ArcelorMittal 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 ArcelorMittal 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 ArcelorMittal, you can compare the effects of market volatilities on Internet Thailand and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and ArcelorMittal.
Diversification Opportunities for Internet Thailand and ArcelorMittal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Internet and ArcelorMittal is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and ArcelorMittal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal has no effect on the direction of Internet Thailand i.e., Internet Thailand and ArcelorMittal go up and down completely randomly.
Pair Corralation between Internet Thailand and ArcelorMittal
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 23.96 times more return on investment than ArcelorMittal. However, Internet Thailand is 23.96 times more volatile than ArcelorMittal. It trades about 0.04 of its potential returns per unit of risk. ArcelorMittal is currently generating about 0.01 per unit of risk. If you would invest 14.00 in Internet Thailand PCL on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Internet Thailand PCL or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand PCL vs. ArcelorMittal
Performance |
| Timeline |
| Internet Thailand PCL |
| ArcelorMittal |
Internet Thailand and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and ArcelorMittal
The main advantage of trading using opposite Internet Thailand and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.| Internet Thailand vs. Marie Brizard Wine | Internet Thailand vs. Harmony Gold Mining | Internet Thailand vs. CapitaLand Investment Limited | Internet Thailand vs. MGIC INVESTMENT |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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