Correlation Between Internet Thailand and PRECISION DRILLING

Can any of the company-specific risk be diversified away by investing in both Internet Thailand and PRECISION DRILLING 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 PRECISION DRILLING 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 PRECISION DRILLING P, you can compare the effects of market volatilities on Internet Thailand and PRECISION DRILLING 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 PRECISION DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and PRECISION DRILLING.

Diversification Opportunities for Internet Thailand and PRECISION DRILLING

-0.13

Correlation Coefficient

Internet Thailand  PRECISION DRILLING

Good diversification

The 3 months correlation between Internet and PRECISION is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and PRECISION DRILLING P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRECISION DRILLING 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 PRECISION DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRECISION DRILLING has no effect on the direction of Internet Thailand i.e., Internet Thailand and PRECISION DRILLING go up and down completely randomly.

Pair Corralation between Internet Thailand and PRECISION DRILLING

Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 2.24 times more return on investment than PRECISION DRILLING. However, Internet Thailand is 2.24 times more volatile than PRECISION DRILLING P. It trades about -0.04 of its potential returns per unit of risk. PRECISION DRILLING P is currently generating about -0.18 per unit of risk. If you would invest  18.00  in Internet Thailand PCL on December 1, 2024 and sell it today you would lose (3.00) from holding Internet Thailand PCL or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Internet Thailand PCL  vs.  PRECISION DRILLING P

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 unsteady 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.

PRECISION DRILLING

Risk-Adjusted Performance

Very Weak

Over the last 90 days PRECISION DRILLING P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Internet Thailand and PRECISION DRILLING

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

The idea behind Internet Thailand PCL and PRECISION DRILLING P 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.