Correlation Between Italian Thai and G J
Can any of the company-specific risk be diversified away by investing in both Italian Thai and G J 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 G J 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 G J Steel, you can compare the effects of market volatilities on Italian Thai and G J 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 G J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and G J.
Diversification Opportunities for Italian Thai and G J
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Italian and GJS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and G J Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G J Steel 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 G J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G J Steel has no effect on the direction of Italian Thai i.e., Italian Thai and G J go up and down completely randomly.
Pair Corralation between Italian Thai and G J
Assuming the 90 days trading horizon Italian Thai Development Public is expected to under-perform the G J. But the stock apears to be less risky and, when comparing its historical volatility, Italian Thai Development Public is 1.5 times less risky than G J. The stock trades about -0.33 of its potential returns per unit of risk. The G J Steel is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 18.00 in G J Steel on August 30, 2024 and sell it today you would lose (2.00) from holding G J Steel or give up 11.11% 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. G J Steel
Performance |
| Timeline |
| Italian Thai Develop |
| G J Steel |
Italian Thai and G J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and G J
The main advantage of trading using opposite Italian Thai and G J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai position performs unexpectedly, G J 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 G J will offset losses from the drop in G J'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 |
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 CEOs Directory module to screen CEOs from public companies around the world.
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