Correlation Between Internet Thailand and MFEC PCL
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and MFEC PCL 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 MFEC PCL 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 MFEC PCL, you can compare the effects of market volatilities on Internet Thailand and MFEC PCL 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 MFEC PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and MFEC PCL.
Diversification Opportunities for Internet Thailand and MFEC PCL
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Internet and MFEC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand Public and MFEC PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFEC PCL 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 MFEC PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFEC PCL has no effect on the direction of Internet Thailand i.e., Internet Thailand and MFEC PCL go up and down completely randomly.
Pair Corralation between Internet Thailand and MFEC PCL
Assuming the 90 days trading horizon Internet Thailand is expected to generate 29.36 times less return on investment than MFEC PCL. But when comparing it to its historical volatility, Internet Thailand Public is 24.22 times less risky than MFEC PCL. It trades about 0.1 of its potential returns per unit of risk. MFEC PCL is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 545.00 in MFEC PCL on August 29, 2024 and sell it today you would earn a total of 70.00 from holding MFEC PCL or generate 12.84% 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. MFEC PCL
Performance |
| Timeline |
| Internet Thailand Public |
| MFEC PCL |
Internet Thailand and MFEC PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and MFEC PCL
The main advantage of trading using opposite Internet Thailand and MFEC PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, MFEC PCL 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 MFEC PCL will offset losses from the drop in MFEC PCL'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 |
| MFEC PCL vs. AP Public | MFEC PCL vs. Jasmine International Public | MFEC PCL vs. Asia Plus Group | MFEC PCL vs. Bangkok Aviation Fuel |
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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