Correlation Between Intouch Holdings and Vanachai Group

Can any of the company-specific risk be diversified away by investing in both Intouch Holdings and Vanachai Group 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 Intouch Holdings and Vanachai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intouch Holdings Public and Vanachai Group Public, you can compare the effects of market volatilities on Intouch Holdings and Vanachai Group 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 Intouch Holdings with a short position of Vanachai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intouch Holdings and Vanachai Group.

Diversification Opportunities for Intouch Holdings and Vanachai Group

-0.57

Correlation Coefficient

Intouch Holdings  Vanachai Group

Excellent diversification

The 3 months correlation between Intouch and Vanachai is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intouch Holdings Public and Vanachai Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanachai Group Public and Intouch Holdings 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 Intouch Holdings Public are associated (or correlated) with Vanachai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanachai Group Public has no effect on the direction of Intouch Holdings i.e., Intouch Holdings and Vanachai Group go up and down completely randomly.

Pair Corralation between Intouch Holdings and Vanachai Group

Assuming the 90 days trading horizon Intouch Holdings Public is expected to generate 1.98 times more return on investment than Vanachai Group. However, Intouch Holdings is 1.98 times more volatile than Vanachai Group Public. It trades about 0.08 of its potential returns per unit of risk. Vanachai Group Public is currently generating about -0.19 per unit of risk. If you would invest  9,025  in Intouch Holdings Public on September 17, 2024 and sell it today you would earn a total of  900.00  from holding Intouch Holdings Public or generate 9.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intouch Holdings Public  vs.  Vanachai Group Public

Intouch Holdings Public

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intouch Holdings Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental indicators, Intouch Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vanachai Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanachai Group 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 technical and 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 Intouch Holdings and Vanachai Group

The main advantage of trading using opposite Intouch Holdings and Vanachai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intouch Holdings position performs unexpectedly, Vanachai Group 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 Vanachai Group will offset losses from the drop in Vanachai Group's long position.

The idea behind Intouch Holdings Public and Vanachai Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.