Correlation Between Italian Thai and Major Cineplex
Can any of the company-specific risk be diversified away by investing in both Italian Thai and Major Cineplex 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 Major Cineplex 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 Major Cineplex Group, you can compare the effects of market volatilities on Italian Thai and Major Cineplex 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 Major Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and Major Cineplex.
Diversification Opportunities for Italian Thai and Major Cineplex
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Italian and Major is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and Major Cineplex Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Cineplex 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 Major Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Cineplex Group has no effect on the direction of Italian Thai i.e., Italian Thai and Major Cineplex go up and down completely randomly.
Pair Corralation between Italian Thai and Major Cineplex
Assuming the 90 days trading horizon Italian Thai Development Public is expected to generate 25.88 times more return on investment than Major Cineplex. However, Italian Thai is 25.88 times more volatile than Major Cineplex Group. It trades about 0.04 of its potential returns per unit of risk. Major Cineplex Group is currently generating about -0.01 per unit of risk. If you would invest 185.00 in Italian Thai Development Public on September 12, 2024 and sell it today you would lose (132.00) from holding Italian Thai Development Public or give up 71.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Italian Thai Development Publi vs. Major Cineplex Group
Performance |
| Timeline |
| Italian Thai Develop |
| Major Cineplex Group |
Italian Thai and Major Cineplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and Major Cineplex
The main advantage of trading using opposite Italian Thai and Major Cineplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai position performs unexpectedly, Major Cineplex 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 Major Cineplex will offset losses from the drop in Major Cineplex'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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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