Correlation Between Internet Thailand and POSCO Thainox
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and POSCO Thainox 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 POSCO Thainox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Thailand Public and POSCO Thainox Public, you can compare the effects of market volatilities on Internet Thailand and POSCO Thainox 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 POSCO Thainox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and POSCO Thainox.
Diversification Opportunities for Internet Thailand and POSCO Thainox
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Internet and POSCO is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand Public and POSCO Thainox Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Thainox Public 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 Public are associated (or correlated) with POSCO Thainox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSCO Thainox Public has no effect on the direction of Internet Thailand i.e., Internet Thailand and POSCO Thainox go up and down completely randomly.
Pair Corralation between Internet Thailand and POSCO Thainox
Assuming the 90 days trading horizon Internet Thailand Public is expected to generate 4.02 times more return on investment than POSCO Thainox. However, Internet Thailand is 4.02 times more volatile than POSCO Thainox Public. It trades about 0.31 of its potential returns per unit of risk. POSCO Thainox Public is currently generating about -0.08 per unit of risk. If you would invest 424.00 in Internet Thailand Public on August 27, 2024 and sell it today you would earn a total of 241.00 from holding Internet Thailand Public or generate 56.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand Public vs. POSCO Thainox Public
Performance |
| Timeline |
| Internet Thailand Public |
| POSCO Thainox Public |
Internet Thailand and POSCO Thainox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and POSCO Thainox
The main advantage of trading using opposite Internet Thailand and POSCO Thainox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, POSCO Thainox 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 POSCO Thainox will offset losses from the drop in POSCO Thainox's long position.| Internet Thailand vs. AP Public | Internet Thailand vs. Jasmine International Public | Internet Thailand vs. Asia Plus Group | Internet Thailand vs. Bangkok Aviation Fuel |
| POSCO Thainox vs. PTT Public | POSCO Thainox vs. PTT Exploration and | POSCO Thainox vs. CP ALL Public | POSCO Thainox vs. Kasikornbank Public |
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 CEOs Directory module to screen CEOs from public companies around the world.
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