Correlation Between Internet Thailand and Lam Soon
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and Lam Soon 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 Lam Soon 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 Lam Soon Public, you can compare the effects of market volatilities on Internet Thailand and Lam Soon 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 Lam Soon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Lam Soon.
Diversification Opportunities for Internet Thailand and Lam Soon
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Internet and Lam is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand Public and Lam Soon Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lam Soon 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 Lam Soon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lam Soon Public has no effect on the direction of Internet Thailand i.e., Internet Thailand and Lam Soon go up and down completely randomly.
Pair Corralation between Internet Thailand and Lam Soon
Assuming the 90 days trading horizon Internet Thailand Public is expected to generate 7.23 times more return on investment than Lam Soon. However, Internet Thailand is 7.23 times more volatile than Lam Soon Public. It trades about 0.28 of its potential returns per unit of risk. Lam Soon Public is currently generating about 0.11 per unit of risk. If you would invest 432.00 in Internet Thailand Public on August 25, 2024 and sell it today you would earn a total of 228.00 from holding Internet Thailand Public or generate 52.78% 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. Lam Soon Public
Performance |
| Timeline |
| Internet Thailand Public |
| Lam Soon Public |
Internet Thailand and Lam Soon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Lam Soon
The main advantage of trading using opposite Internet Thailand and Lam Soon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, Lam Soon 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 Lam Soon will offset losses from the drop in Lam Soon'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 |
| Lam Soon vs. CP ALL Public | Lam Soon vs. Carabao Group Public | Lam Soon vs. Thai Union Group | Lam Soon vs. Minor International 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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