Correlation Between G J and Italian Thai

Can any of the company-specific risk be diversified away by investing in both G J 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 G J and Italian Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G J Steel and Italian Thai Development Public, you can compare the effects of market volatilities on G J 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 G J with a short position of Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of G J and Italian Thai.

Diversification Opportunities for G J and Italian Thai

0.78

Correlation Coefficient

G J  Italian Thai

Poor diversification

The 3 months correlation between GJS and Italian is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding G J Steel 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 G J 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 G J Steel 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 G J i.e., G J and Italian Thai go up and down completely randomly.

Pair Corralation between G J and Italian Thai

Assuming the 90 days trading horizon G J Steel is expected to generate 1.37 times more return on investment than Italian Thai. However, G J is 1.37 times more volatile than Italian Thai Development Public. It trades about -0.02 of its potential returns per unit of risk. Italian Thai Development Public is currently generating about -0.14 per unit of risk. If you would invest  18.00  in G J Steel on September 15, 2024 and sell it today you would lose (2.00) from holding G J Steel or give up 11.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

G J Steel  vs.  Italian Thai Development Publi

G J Steel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G J Steel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Italian Thai Develop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Italian Thai Development Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with G J and Italian Thai

The main advantage of trading using opposite G J and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G J 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.

The idea behind G J Steel and Italian Thai Development Public 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.