Correlation Between Internet Thailand and ALD SA

Can any of the company-specific risk be diversified away by investing in both Internet Thailand and ALD SA 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 Internet Thailand and ALD SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Internet Thailand PCL and ALD SA, you can compare the effects of market volatilities on Internet Thailand and ALD SA 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 Internet Thailand with a short position of ALD SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and ALD SA.

Diversification Opportunities for Internet Thailand and ALD SA

0.0

Correlation Coefficient

Internet Thailand  ALD SA

Pay attention - limited upside

The 3 months correlation between Internet and ALD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and ALD SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALD SA and Internet Thailand 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 Internet Thailand PCL are associated (or correlated) with ALD SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALD SA has no effect on the direction of Internet Thailand i.e., Internet Thailand and ALD SA go up and down completely randomly.

Pair Corralation between Internet Thailand and ALD SA

If you would invest (100.00) in ALD SA on December 22, 2024 and sell it today you would earn a total of  100.00  from holding ALD SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Internet Thailand PCL  vs.  ALD SA

Internet Thailand PCL

Risk-Adjusted Performance

Very Weak

Over the last 90 days Internet Thailand PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

ALD SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALD SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ALD SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Internet Thailand and ALD SA

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

The idea behind Internet Thailand PCL and ALD SA 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.