Correlation Between Thanh Thai and Idico JSC
Can any of the company-specific risk be diversified away by investing in both Thanh Thai and Idico JSC 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 Thanh Thai and Idico JSC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanh Thai Group and Idico JSC, you can compare the effects of market volatilities on Thanh Thai and Idico JSC 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 Thanh Thai with a short position of Idico JSC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanh Thai and Idico JSC.
Diversification Opportunities for Thanh Thai and Idico JSC
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thanh and Idico is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Thanh Thai Group and Idico JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Idico JSC and Thanh 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 Thanh Thai Group are associated (or correlated) with Idico JSC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Idico JSC has no effect on the direction of Thanh Thai i.e., Thanh Thai and Idico JSC go up and down completely randomly.
Pair Corralation between Thanh Thai and Idico JSC
Assuming the 90 days trading horizon Thanh Thai Group is expected to generate 5.43 times more return on investment than Idico JSC. However, Thanh Thai is 5.43 times more volatile than Idico JSC. It trades about 0.15 of its potential returns per unit of risk. Idico JSC is currently generating about -0.07 per unit of risk. If you would invest 510,000 in Thanh Thai Group on August 30, 2024 and sell it today you would earn a total of 100,000 from holding Thanh Thai Group or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.73% |
| Values | Daily Returns |
Thanh Thai Group vs. Idico JSC
Performance |
| Timeline |
| Thanh Thai Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Idico JSC |
Thanh Thai and Idico JSC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanh Thai and Idico JSC
The main advantage of trading using opposite Thanh Thai and Idico JSC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanh Thai position performs unexpectedly, Idico JSC 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 Idico JSC will offset losses from the drop in Idico JSC's long position.| Thanh Thai vs. Petrolimex Information Technology | Thanh Thai vs. Development Investment Construction | Thanh Thai vs. Elcom Technology Communications | Thanh Thai vs. 577 Investment Corp |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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