Correlation Between Italian Thai and Thai Stanley
Can any of the company-specific risk be diversified away by investing in both Italian Thai and Thai Stanley 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 Thai Stanley 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 Thai Stanley Electric, you can compare the effects of market volatilities on Italian Thai and Thai Stanley 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 Thai Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and Thai Stanley.
Diversification Opportunities for Italian Thai and Thai Stanley
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Italian and Thai is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and Thai Stanley Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Stanley Electric 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 Thai Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Stanley Electric has no effect on the direction of Italian Thai i.e., Italian Thai and Thai Stanley go up and down completely randomly.
Pair Corralation between Italian Thai and Thai Stanley
Assuming the 90 days trading horizon Italian Thai Development Public is expected to under-perform the Thai Stanley. In addition to that, Italian Thai is 5.74 times more volatile than Thai Stanley Electric. It trades about -0.19 of its total potential returns per unit of risk. Thai Stanley Electric is currently generating about 0.08 per unit of volatility. If you would invest 21,800 in Thai Stanley Electric on September 12, 2024 and sell it today you would earn a total of 200.00 from holding Thai Stanley Electric or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Italian Thai Development Publi vs. Thai Stanley Electric
Performance |
| Timeline |
| Italian Thai Develop |
| Thai Stanley Electric |
Italian Thai and Thai Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Italian Thai and Thai Stanley
The main advantage of trading using opposite Italian Thai and Thai Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Italian Thai position performs unexpectedly, Thai Stanley 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 Thai Stanley will offset losses from the drop in Thai Stanley'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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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