Correlation Between Visa and Itthirit Nice
Can any of the company-specific risk be diversified away by investing in both Visa and Itthirit Nice 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 Visa and Itthirit Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Itthirit Nice Corp, you can compare the effects of market volatilities on Visa and Itthirit Nice 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 Visa with a short position of Itthirit Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Itthirit Nice.
Diversification Opportunities for Visa and Itthirit Nice
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Visa and Itthirit is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Itthirit Nice Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itthirit Nice Corp and Visa 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 Visa Class A are associated (or correlated) with Itthirit Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itthirit Nice Corp has no effect on the direction of Visa i.e., Visa and Itthirit Nice go up and down completely randomly.
Pair Corralation between Visa and Itthirit Nice
Taking into account the 90-day investment horizon Visa is expected to generate 32.94 times less return on investment than Itthirit Nice. But when comparing it to its historical volatility, Visa Class A is 58.19 times less risky than Itthirit Nice. It trades about 0.1 of its potential returns per unit of risk. Itthirit Nice Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Itthirit Nice Corp on September 19, 2024 and sell it today you would earn a total of 25.00 from holding Itthirit Nice Corp or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.9% |
| Values | Daily Returns |
Visa Class A vs. Itthirit Nice Corp
Performance |
| Timeline |
| Visa Class A |
| Itthirit Nice Corp |
Visa and Itthirit Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Itthirit Nice
The main advantage of trading using opposite Visa and Itthirit Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Itthirit Nice 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 Itthirit Nice will offset losses from the drop in Itthirit Nice's long position.The idea behind Visa Class A and Itthirit Nice Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Itthirit Nice vs. Delta Electronics Public | Itthirit Nice vs. Delta Electronics Public | Itthirit Nice vs. Airports of Thailand | Itthirit Nice vs. Airports of Thailand |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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