Correlation Between Sanyo Chemical and Internet Thailand
Can any of the company-specific risk be diversified away by investing in both Sanyo Chemical and Internet Thailand 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 Sanyo Chemical and Internet Thailand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanyo Chemical Industries and Internet Thailand PCL, you can compare the effects of market volatilities on Sanyo Chemical and Internet Thailand 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 Sanyo Chemical with a short position of Internet Thailand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanyo Chemical and Internet Thailand.
Diversification Opportunities for Sanyo Chemical and Internet Thailand
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanyo and Internet is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sanyo Chemical Industries and Internet Thailand PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand PCL and Sanyo Chemical 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 Sanyo Chemical Industries are associated (or correlated) with Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand PCL has no effect on the direction of Sanyo Chemical i.e., Sanyo Chemical and Internet Thailand go up and down completely randomly.
Pair Corralation between Sanyo Chemical and Internet Thailand
Assuming the 90 days horizon Sanyo Chemical Industries is expected to under-perform the Internet Thailand. But the stock apears to be less risky and, when comparing its historical volatility, Sanyo Chemical Industries is 8.69 times less risky than Internet Thailand. The stock trades about -0.09 of its potential returns per unit of risk. The Internet Thailand PCL is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Internet Thailand PCL on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Internet Thailand PCL or generate 45.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sanyo Chemical Industries vs. Internet Thailand PCL
Performance |
| Timeline |
| Sanyo Chemical Industries |
| Internet Thailand PCL |
Sanyo Chemical and Internet Thailand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanyo Chemical and Internet Thailand
The main advantage of trading using opposite Sanyo Chemical and Internet Thailand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanyo Chemical position performs unexpectedly, Internet Thailand 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 Internet Thailand will offset losses from the drop in Internet Thailand's long position.| Sanyo Chemical vs. Linde PLC | Sanyo Chemical vs. The Sherwin Williams | Sanyo Chemical vs. SIKA AG UNSPADR | Sanyo Chemical vs. LyondellBasell Industries NV |
| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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