Correlation Between Internet Thailand and Pacific Pipe
Can any of the company-specific risk be diversified away by investing in both Internet Thailand and Pacific Pipe 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 Pacific Pipe 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 Pacific Pipe Public, you can compare the effects of market volatilities on Internet Thailand and Pacific Pipe 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 Pacific Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Pacific Pipe.
Diversification Opportunities for Internet Thailand and Pacific Pipe
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Internet and Pacific is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand Public and Pacific Pipe Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Pipe 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 Pacific Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Pipe Public has no effect on the direction of Internet Thailand i.e., Internet Thailand and Pacific Pipe go up and down completely randomly.
Pair Corralation between Internet Thailand and Pacific Pipe
Assuming the 90 days trading horizon Internet Thailand is expected to generate 1.38 times less return on investment than Pacific Pipe. In addition to that, Internet Thailand is 1.9 times more volatile than Pacific Pipe Public. It trades about 0.05 of its total potential returns per unit of risk. Pacific Pipe Public is currently generating about 0.13 per unit of volatility. If you would invest 168.00 in Pacific Pipe Public on November 2, 2024 and sell it today you would earn a total of 12.00 from holding Pacific Pipe Public or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Internet Thailand Public vs. Pacific Pipe Public
Performance |
| Timeline |
| Internet Thailand Public |
| Pacific Pipe Public |
Internet Thailand and Pacific Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Pacific Pipe
The main advantage of trading using opposite Internet Thailand and Pacific Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand position performs unexpectedly, Pacific Pipe 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 Pacific Pipe will offset losses from the drop in Pacific Pipe's long position.| Internet Thailand vs. Jasmine International Public | Internet Thailand vs. Hana Microelectronics Public | Internet Thailand vs. AP Public | Internet Thailand vs. KCE Electronics Public |
| Pacific Pipe vs. TMT Steel Public | Pacific Pipe vs. MCS Steel Public | Pacific Pipe vs. KGI Securities Public | Pacific Pipe vs. Permsin Steel Works |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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