Correlation Between IT City and Nawarat Patanakarn
Can any of the company-specific risk be diversified away by investing in both IT City and Nawarat Patanakarn 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 Nawarat Patanakarn 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 Nawarat Patanakarn Public, you can compare the effects of market volatilities on IT City and Nawarat Patanakarn 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 Nawarat Patanakarn. Check out your portfolio center. Please also check ongoing floating volatility patterns of IT City and Nawarat Patanakarn.
Diversification Opportunities for IT City and Nawarat Patanakarn
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IT City and Nawarat is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding IT City Public and Nawarat Patanakarn Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nawarat Patanakarn Public 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 Nawarat Patanakarn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nawarat Patanakarn Public has no effect on the direction of IT City i.e., IT City and Nawarat Patanakarn go up and down completely randomly.
Pair Corralation between IT City and Nawarat Patanakarn
Assuming the 90 days horizon IT City Public is expected to generate 1.0 times more return on investment than Nawarat Patanakarn. However, IT City Public is 1.0 times less risky than Nawarat Patanakarn. It trades about 0.04 of its potential returns per unit of risk. Nawarat Patanakarn 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. Nawarat Patanakarn Public
Performance |
| Timeline |
| IT City Public |
| Nawarat Patanakarn Public |
IT City and Nawarat Patanakarn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IT City and Nawarat Patanakarn
The main advantage of trading using opposite IT City and Nawarat Patanakarn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IT City position performs unexpectedly, Nawarat Patanakarn 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 Nawarat Patanakarn will offset losses from the drop in Nawarat Patanakarn'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 |
| Nawarat Patanakarn vs. Asia Aviation Public | Nawarat Patanakarn vs. Bangkok Dusit Medical | Nawarat Patanakarn vs. Bangkok Expressway and | Nawarat Patanakarn vs. Airports of Thailand |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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