Correlation Between Italian Thai and Singer Thailand

Can any of the company-specific risk be diversified away by investing in both Italian Thai and Singer 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 Italian Thai and Singer Thailand 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 Singer Thailand Public, you can compare the effects of market volatilities on Italian Thai and Singer 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 Italian Thai with a short position of Singer Thailand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Italian Thai and Singer Thailand.

Diversification Opportunities for Italian Thai and Singer Thailand

0.88

Correlation Coefficient

Italian Thai  Singer Thailand

Very poor diversification

The 3 months correlation between Italian and Singer is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and Singer Thailand Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singer Thailand 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 Singer Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singer Thailand Public has no effect on the direction of Italian Thai i.e., Italian Thai and Singer Thailand go up and down completely randomly.

Pair Corralation between Italian Thai and Singer Thailand

Assuming the 90 days trading horizon Italian Thai Development Public is expected to generate 1.08 times more return on investment than Singer Thailand. However, Italian Thai is 1.08 times more volatile than Singer Thailand Public. It trades about -0.12 of its potential returns per unit of risk. Singer Thailand Public is currently generating about -0.17 per unit of risk. If you would invest  67.00  in Italian Thai Development Public on September 14, 2024 and sell it today you would lose (15.00) from holding Italian Thai Development Public or give up 22.39% of portfolio value over 90 days.

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

Italian Thai Development Publi  vs.  Singer Thailand 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.

Singer Thailand Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singer Thailand 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Italian Thai and Singer Thailand

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

The idea behind Italian Thai Development Public and Singer Thailand 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.