Correlation Between IT City and Italian Thai
Can any of the company-specific risk be diversified away by investing in both IT City and Italian Thai 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 IT City and Italian Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IT City Public and Italian Thai Development Public, you can compare the effects of market volatilities on IT City and Italian Thai 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 IT City with a short position of Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of IT City and Italian Thai.
Diversification Opportunities for IT City and Italian Thai
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IT City and Italian is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding IT City Public and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop and IT City 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 IT City Public are associated (or correlated) with Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of IT City i.e., IT City and Italian Thai go up and down completely randomly.
Pair Corralation between IT City and Italian Thai
Assuming the 90 days horizon IT City Public is expected to generate 1.0 times more return on investment than Italian Thai. However, IT City Public is 1.0 times less risky than Italian Thai. It trades about 0.04 of its potential returns per unit of risk. Italian Thai Development Public is currently generating about 0.04 per unit of risk. If you would invest 459.00 in IT City Public on September 3, 2024 and sell it today you would earn a total of 3.00 from holding IT City Public or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IT City Public vs. Italian Thai Development Publi
Performance |
| Timeline |
| IT City Public |
| Italian Thai Develop |
IT City and Italian Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IT City and Italian Thai
The main advantage of trading using opposite IT City and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IT City position performs unexpectedly, Italian Thai 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 Italian Thai will offset losses from the drop in Italian Thai's long position.| IT City vs. Internet Thailand Public | IT City vs. Jasmine International Public | IT City vs. Hana Microelectronics Public | IT City vs. Italian Thai Development Public |
| Italian Thai vs. Land and Houses | Italian Thai vs. CH Karnchang Public | Italian Thai vs. Krung Thai Bank | Italian Thai vs. Bangkok Bank 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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