Correlation Between Internet Thailand and TRADEGATE

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

Diversification Opportunities for Internet Thailand and TRADEGATE

0.56

Correlation Coefficient

Internet Thailand  TRADEGATE

Very weak diversification

The 3 months correlation between Internet and TRADEGATE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of Internet Thailand i.e., Internet Thailand and TRADEGATE go up and down completely randomly.

Pair Corralation between Internet Thailand and TRADEGATE

Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 19.2 times more return on investment than TRADEGATE. However, Internet Thailand is 19.2 times more volatile than TRADEGATE. It trades about 0.11 of its potential returns per unit of risk. TRADEGATE is currently generating about 0.0 per unit of risk. If you would invest  12.00  in Internet Thailand PCL on September 23, 2024 and sell it today you would earn a total of  4.00  from holding Internet Thailand PCL or generate 33.33% return on investment over 90 days.

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

Internet Thailand PCL  vs.  TRADEGATE

Internet Thailand PCL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Thailand PCL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Internet Thailand unveiled solid returns over the last few months and may actually be approaching a breakup point.

TRADEGATE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRADEGATE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TRADEGATE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Internet Thailand and TRADEGATE

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

The idea behind Internet Thailand PCL and TRADEGATE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.