Correlation Between Internet Thailand and Bank of America
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and Bank of America 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 Bank of America 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 Verizon Communications, you can compare the effects of market volatilities on Internet Thailand and Bank of America 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 Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Bank of America.
Diversification Opportunities for Internet Thailand and Bank of America
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Internet and Bank is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications 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 Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of Internet Thailand i.e., Internet Thailand and Bank of America go up and down completely randomly.
Pair Corralation between Internet Thailand and Bank of America
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 5.1 times more return on investment than Bank of America. However, Internet Thailand is 5.1 times more volatile than Verizon Communications. It trades about 0.43 of its potential returns per unit of risk. Verizon Communications is currently generating about 0.34 per unit of risk. If you would invest 11.00 in Internet Thailand PCL on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Internet Thailand PCL or generate 72.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Internet Thailand PCL vs. Verizon Communications
Performance |
| Timeline |
| Internet Thailand PCL |
| Verizon Communications |
Internet Thailand and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Bank of America
The main advantage of trading using opposite Internet Thailand and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
| Bank of America vs. Apple Inc | Bank of America vs. Apple Inc | Bank of America vs. Microsoft | Bank of America vs. Microsoft |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |