Correlation Between Plan B and ALT Telecom
Can any of the company-specific risk be diversified away by investing in both Plan B and ALT Telecom 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 Plan B and ALT Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plan B Media and ALT Telecom Public, you can compare the effects of market volatilities on Plan B and ALT Telecom 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 Plan B with a short position of ALT Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plan B and ALT Telecom.
Diversification Opportunities for Plan B and ALT Telecom
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Plan and ALT is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Plan B Media and ALT Telecom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALT Telecom Public and Plan B 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 Plan B Media are associated (or correlated) with ALT Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALT Telecom Public has no effect on the direction of Plan B i.e., Plan B and ALT Telecom go up and down completely randomly.
Pair Corralation between Plan B and ALT Telecom
Assuming the 90 days trading horizon Plan B Media is expected to generate 1.27 times more return on investment than ALT Telecom. However, Plan B is 1.27 times more volatile than ALT Telecom Public. It trades about -0.09 of its potential returns per unit of risk. ALT Telecom Public is currently generating about -0.24 per unit of risk. If you would invest 807.00 in Plan B Media on September 5, 2024 and sell it today you would lose (62.00) from holding Plan B Media or give up 7.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plan B Media vs. ALT Telecom Public
Performance |
| Timeline |
| Plan B Media |
| ALT Telecom Public |
Plan B and ALT Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plan B and ALT Telecom
The main advantage of trading using opposite Plan B and ALT Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plan B position performs unexpectedly, ALT Telecom 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 ALT Telecom will offset losses from the drop in ALT Telecom's long position.| Plan B vs. VGI Public | Plan B vs. Minor International Public | Plan B vs. BTS Group Holdings | Plan B vs. Bangkok Dusit Medical |
| ALT Telecom vs. Healthlead Public | ALT Telecom vs. Nonthavej Hospital Public | ALT Telecom vs. Plan B Media | ALT Telecom vs. Dexon Technology PCL |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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