Correlation Between Italian Thai and International Research
Can any of the company-specific risk be diversified away by investing in both Italian Thai and International Research 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 International Research 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 International Research, you can compare the effects of market volatilities on Italian Thai and International Research 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 International Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and International Research.
Diversification Opportunities for Italian Thai and International Research
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Italian and International is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and International Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Research 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 International Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Research has no effect on the direction of Italian Thai i.e., Italian Thai and International Research go up and down completely randomly.
Pair Corralation between Italian Thai and International Research
Assuming the 90 days trading horizon Italian Thai Development Public is expected to under-perform the International Research. In addition to that, Italian Thai is 2.26 times more volatile than International Research. It trades about -0.36 of its total potential returns per unit of risk. International Research is currently generating about -0.34 per unit of volatility. If you would invest 57.00 in International Research on August 29, 2024 and sell it today you would lose (6.00) from holding International Research or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Italian Thai Development Publi vs. International Research
Performance |
| Timeline |
| Italian Thai Develop |
| International Research |
Italian Thai and International Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and International Research
The main advantage of trading using opposite Italian Thai and International Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai position performs unexpectedly, International Research 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 International Research will offset losses from the drop in International Research'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 |
| International Research vs. Internet Thailand Public | International Research vs. Jasmine International Public | International Research vs. Hydrotek Public | International Research vs. Home Pottery 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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