Correlation Between Italian Thai and Asia Plus
Can any of the company-specific risk be diversified away by investing in both Italian Thai and Asia Plus 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 Asia Plus 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 Asia Plus Group, you can compare the effects of market volatilities on Italian Thai and Asia Plus 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 Asia Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and Asia Plus.
Diversification Opportunities for Italian Thai and Asia Plus
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Italian and Asia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and Asia Plus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Plus Group 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 Asia Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Plus Group has no effect on the direction of Italian Thai i.e., Italian Thai and Asia Plus go up and down completely randomly.
Pair Corralation between Italian Thai and Asia Plus
Assuming the 90 days trading horizon Italian Thai Development Public is expected to under-perform the Asia Plus. In addition to that, Italian Thai is 1.82 times more volatile than Asia Plus Group. It trades about -0.48 of its total potential returns per unit of risk. Asia Plus Group is currently generating about -0.05 per unit of volatility. If you would invest 234.00 in Asia Plus Group on November 4, 2024 and sell it today you would lose (2.00) from holding Asia Plus Group or give up 0.85% 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. Asia Plus Group
Performance |
| Timeline |
| Italian Thai Develop |
| Asia Plus Group |
Italian Thai and Asia Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and Asia Plus
The main advantage of trading using opposite Italian Thai and Asia Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai position performs unexpectedly, Asia Plus 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 Asia Plus will offset losses from the drop in Asia Plus' 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 |
| Asia Plus vs. KGI Securities Public | Asia Plus vs. Bangkok Bank Public | Asia Plus vs. Land and Houses | Asia Plus 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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