Correlation Between Italian Thai and Com7 PCL
Can any of the company-specific risk be diversified away by investing in both Italian Thai and Com7 PCL 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 Com7 PCL 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 Com7 PCL, you can compare the effects of market volatilities on Italian Thai and Com7 PCL 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 Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and Com7 PCL.
Diversification Opportunities for Italian Thai and Com7 PCL
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Italian and Com7 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL 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 Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of Italian Thai i.e., Italian Thai and Com7 PCL go up and down completely randomly.
Pair Corralation between Italian Thai and Com7 PCL
Assuming the 90 days trading horizon Italian Thai Development Public is expected to generate 19.8 times more return on investment than Com7 PCL. However, Italian Thai is 19.8 times more volatile than Com7 PCL. It trades about 0.04 of its potential returns per unit of risk. Com7 PCL is currently generating about 0.0 per unit of risk. If you would invest 185.00 in Italian Thai Development Public on September 13, 2024 and sell it today you would lose (133.00) from holding Italian Thai Development Public or give up 71.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Italian Thai Development Publi vs. Com7 PCL
Performance |
| Timeline |
| Italian Thai Develop |
| Com7 PCL |
Italian Thai and Com7 PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and Com7 PCL
The main advantage of trading using opposite Italian Thai and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai position performs unexpectedly, Com7 PCL 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 Com7 PCL will offset losses from the drop in Com7 PCL'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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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