Correlation Between Internet Thailand and Takara Holdings
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and Takara Holdings 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 Takara Holdings 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 Takara Holdings, you can compare the effects of market volatilities on Internet Thailand and Takara Holdings 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 Takara Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Takara Holdings.
Diversification Opportunities for Internet Thailand and Takara Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Internet and Takara is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Takara Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takara Holdings 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 Takara Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takara Holdings has no effect on the direction of Internet Thailand i.e., Internet Thailand and Takara Holdings go up and down completely randomly.
Pair Corralation between Internet Thailand and Takara Holdings
Assuming the 90 days trading horizon Internet Thailand PCL is expected to under-perform the Takara Holdings. In addition to that, Internet Thailand is 2.3 times more volatile than Takara Holdings. It trades about -0.1 of its total potential returns per unit of risk. Takara Holdings is currently generating about 0.35 per unit of volatility. If you would invest 700.00 in Takara Holdings on September 20, 2024 and sell it today you would earn a total of 110.00 from holding Takara Holdings or generate 15.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Internet Thailand PCL vs. Takara Holdings
Performance |
| Timeline |
| Internet Thailand PCL |
| Takara Holdings |
Internet Thailand and Takara Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Takara Holdings
The main advantage of trading using opposite Internet Thailand and Takara Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, Takara Holdings 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 Takara Holdings will offset losses from the drop in Takara Holdings' long position.| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
| Takara Holdings vs. Spirent Communications plc | Takara Holdings vs. Hemisphere Energy Corp | Takara Holdings vs. Internet Thailand PCL | Takara Holdings vs. TT Electronics PLC |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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