Correlation Between TOA PAINT and Interlink Communication
Can any of the company-specific risk be diversified away by investing in both TOA PAINT and Interlink Communication 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 TOA PAINT and Interlink Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOA PAINT and Interlink Communication Public, you can compare the effects of market volatilities on TOA PAINT and Interlink Communication 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 TOA PAINT with a short position of Interlink Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOA PAINT and Interlink Communication.
Diversification Opportunities for TOA PAINT and Interlink Communication
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TOA and Interlink is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding TOA PAINT and Interlink Communication Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Communication and TOA PAINT 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 TOA PAINT are associated (or correlated) with Interlink Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Communication has no effect on the direction of TOA PAINT i.e., TOA PAINT and Interlink Communication go up and down completely randomly.
Pair Corralation between TOA PAINT and Interlink Communication
Assuming the 90 days trading horizon TOA PAINT is expected to under-perform the Interlink Communication. In addition to that, TOA PAINT is 1.32 times more volatile than Interlink Communication Public. It trades about -0.05 of its total potential returns per unit of risk. Interlink Communication Public is currently generating about 0.0 per unit of volatility. If you would invest 621.00 in Interlink Communication Public on September 14, 2024 and sell it today you would lose (41.00) from holding Interlink Communication Public or give up 6.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOA PAINT vs. Interlink Communication Public
Performance |
| Timeline |
| TOA PAINT |
| Interlink Communication |
TOA PAINT and Interlink Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOA PAINT and Interlink Communication
The main advantage of trading using opposite TOA PAINT and Interlink Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOA PAINT position performs unexpectedly, Interlink Communication 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 Interlink Communication will offset losses from the drop in Interlink Communication's long position.| TOA PAINT vs. Interlink Communication Public | TOA PAINT vs. Turnkey Communication Services | TOA PAINT vs. Krung Thai Bank | TOA PAINT vs. Charan Insurance Public |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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