Correlation Between Major Cineplex and Italian Thai
Can any of the company-specific risk be diversified away by investing in both Major Cineplex and Italian Thai 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 Major Cineplex and Italian Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Cineplex Group and Italian Thai Development Public, you can compare the effects of market volatilities on Major Cineplex and Italian Thai 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 Major Cineplex with a short position of Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Cineplex and Italian Thai.
Diversification Opportunities for Major Cineplex and Italian Thai
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Major and Italian is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Major Cineplex Group and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop and Major Cineplex 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 Major Cineplex Group are associated (or correlated) with Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of Major Cineplex i.e., Major Cineplex and Italian Thai go up and down completely randomly.
Pair Corralation between Major Cineplex and Italian Thai
Assuming the 90 days trading horizon Major Cineplex Group is expected to under-perform the Italian Thai. But the stock apears to be less risky and, when comparing its historical volatility, Major Cineplex Group is 25.88 times less risky than Italian Thai. The stock trades about -0.01 of its potential returns per unit of risk. The Italian Thai Development Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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 |
Major Cineplex Group vs. Italian Thai Development Publi
Performance |
| Timeline |
| Major Cineplex Group |
| Italian Thai Develop |
Major Cineplex and Italian Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Cineplex and Italian Thai
The main advantage of trading using opposite Major Cineplex and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Cineplex position performs unexpectedly, Italian Thai 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 Italian Thai will offset losses from the drop in Italian Thai's long position.| Major Cineplex vs. Home Product Center | Major Cineplex vs. Land and Houses | Major Cineplex vs. Minor International Public | Major Cineplex vs. Advanced Info Service |
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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 Stocks Directory module to find actively traded stocks across global markets.
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