Correlation Between Internet Thailand and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and Consolidated Communications 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 Consolidated Communications 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 Consolidated Communications Holdings, you can compare the effects of market volatilities on Internet Thailand and Consolidated Communications 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 Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Consolidated Communications.
Diversification Opportunities for Internet Thailand and Consolidated Communications
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Internet and Consolidated is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of Internet Thailand i.e., Internet Thailand and Consolidated Communications go up and down completely randomly.
Pair Corralation between Internet Thailand and Consolidated Communications
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 22.44 times more return on investment than Consolidated Communications. However, Internet Thailand is 22.44 times more volatile than Consolidated Communications Holdings. It trades about 0.05 of its potential returns per unit of risk. Consolidated Communications Holdings is currently generating about 0.04 per unit of risk. If you would invest 12.00 in Internet Thailand PCL on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Internet Thailand PCL or generate 50.0% 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. Consolidated Communications Ho
Performance |
| Timeline |
| Internet Thailand PCL |
| Consolidated Communications |
Internet Thailand and Consolidated Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Consolidated Communications
The main advantage of trading using opposite Internet Thailand and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' long position.| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
| Consolidated Communications vs. Harmony Gold Mining | Consolidated Communications vs. USWE SPORTS AB | Consolidated Communications vs. SPORT LISBOA E | Consolidated Communications vs. Columbia Sportswear |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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