Correlation Between Internet Thailand and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Internet Thailand and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and CHINA EDUCATION.
Diversification Opportunities for Internet Thailand and CHINA EDUCATION
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Internet and CHINA is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Internet Thailand i.e., Internet Thailand and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Internet Thailand and CHINA EDUCATION
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 1.51 times more return on investment than CHINA EDUCATION. However, Internet Thailand is 1.51 times more volatile than CHINA EDUCATION GROUP. It trades about 0.27 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.23 per unit of risk. If you would invest 11.00 in Internet Thailand PCL on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Internet Thailand PCL or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand PCL vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Internet Thailand PCL |
| CHINA EDUCATION GROUP |
Internet Thailand and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and CHINA EDUCATION
The main advantage of trading using opposite Internet Thailand and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Internet Thailand vs. CHINA EDUCATION GROUP | Internet Thailand vs. Fukuyama Transporting Co | Internet Thailand vs. EMBARK EDUCATION LTD | Internet Thailand vs. Perdoceo Education |
| CHINA EDUCATION vs. DALATA HOTEL | CHINA EDUCATION vs. Choice Hotels International | CHINA EDUCATION vs. Soken Chemical Engineering | CHINA EDUCATION vs. Host 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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