Correlation Between Italian Thai and AJ Advance
Can any of the company-specific risk be diversified away by investing in both Italian Thai and AJ Advance 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 Italian Thai and AJ Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Italian Thai Development Public and AJ Advance Technology, you can compare the effects of market volatilities on Italian Thai and AJ Advance 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 Italian Thai with a short position of AJ Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and AJ Advance.
Diversification Opportunities for Italian Thai and AJ Advance
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Italian and AJA is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and AJ Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Advance Technology and Italian Thai 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 Italian Thai Development Public are associated (or correlated) with AJ Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Advance Technology has no effect on the direction of Italian Thai i.e., Italian Thai and AJ Advance go up and down completely randomly.
Pair Corralation between Italian Thai and AJ Advance
Assuming the 90 days trading horizon Italian Thai is expected to generate 1.19 times less return on investment than AJ Advance. But when comparing it to its historical volatility, Italian Thai Development Public is 1.0 times less risky than AJ Advance. It trades about 0.04 of its potential returns per unit of risk. AJ Advance Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 24.00 in AJ Advance Technology on September 19, 2024 and sell it today you would lose (8.00) from holding AJ Advance Technology or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Italian Thai Development Publi vs. AJ Advance Technology
Performance |
| Timeline |
| Italian Thai Develop |
| AJ Advance Technology |
Italian Thai and AJ Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and AJ Advance
The main advantage of trading using opposite Italian Thai and AJ Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai position performs unexpectedly, AJ Advance 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 AJ Advance will offset losses from the drop in AJ Advance's long position.| Italian Thai vs. Land and Houses | Italian Thai vs. CH Karnchang Public | Italian Thai vs. Krung Thai Bank | Italian Thai vs. Bangkok Bank Public |
| AJ Advance vs. Hwa Fong Rubber | AJ Advance vs. AAPICO Hitech Public | AJ Advance vs. Haad Thip Public | AJ Advance vs. Italian Thai Development 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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