Correlation Between Italian Thai and MCOT Public

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

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

Diversification Opportunities for Italian Thai and MCOT Public

-0.37

Correlation Coefficient

Italian Thai  MCOT Public

Very good diversification

The 3 months correlation between Italian and MCOT is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and MCOT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCOT Public and Italian Thai 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 Italian Thai Development Public are associated (or correlated) with MCOT Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCOT Public has no effect on the direction of Italian Thai i.e., Italian Thai and MCOT Public go up and down completely randomly.

Pair Corralation between Italian Thai and MCOT Public

Assuming the 90 days trading horizon Italian Thai Development Public is expected to under-perform the MCOT Public. But the stock apears to be less risky and, when comparing its historical volatility, Italian Thai Development Public is 2.72 times less risky than MCOT Public. The stock trades about -0.21 of its potential returns per unit of risk. The MCOT Public is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  535.00  in MCOT Public on September 16, 2024 and sell it today you would earn a total of  110.00  from holding MCOT Public or generate 20.56% return on investment over 90 days.

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

Italian Thai Development Publi  vs.  MCOT Public

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.

MCOT Public

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MCOT Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, MCOT Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Italian Thai and MCOT Public

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

The idea behind Italian Thai Development Public and MCOT 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.