Correlation Between Internet Thailand and Microsoft
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on Internet Thailand and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Microsoft.
Diversification Opportunities for Internet Thailand and Microsoft
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Internet and Microsoft is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Internet Thailand i.e., Internet Thailand and Microsoft go up and down completely randomly.
Pair Corralation between Internet Thailand and Microsoft
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 31.54 times more return on investment than Microsoft. However, Internet Thailand is 31.54 times more volatile than Microsoft. It trades about 0.04 of its potential returns per unit of risk. Microsoft is currently generating about 0.1 per unit of risk. If you would invest 13.00 in Internet Thailand PCL on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Internet Thailand PCL or generate 38.46% 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. Microsoft
Performance |
| Timeline |
| Internet Thailand PCL |
| Microsoft |
Internet Thailand and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Microsoft
The main advantage of trading using opposite Internet Thailand and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
| Microsoft vs. QURATE RETAIL INC | Microsoft vs. The Trade Desk | Microsoft vs. Consolidated Communications Holdings | Microsoft vs. Internet Thailand PCL |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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