Correlation Between Infraset Public and Muangthai Capital

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

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

Diversification Opportunities for Infraset Public and Muangthai Capital

-0.27

Correlation Coefficient

Infraset Public  Muangthai Capital

Very good diversification

The 3 months correlation between Infraset and Muangthai is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Infraset Public and Muangthai Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muangthai Capital Public and Infraset Public 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 Infraset Public are associated (or correlated) with Muangthai Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muangthai Capital Public has no effect on the direction of Infraset Public i.e., Infraset Public and Muangthai Capital go up and down completely randomly.

Pair Corralation between Infraset Public and Muangthai Capital

Assuming the 90 days trading horizon Infraset Public is expected to generate 1.01 times less return on investment than Muangthai Capital. In addition to that, Infraset Public is 1.0 times more volatile than Muangthai Capital Public. It trades about 0.04 of its total potential returns per unit of risk. Muangthai Capital Public is currently generating about 0.04 per unit of volatility. If you would invest  3,631  in Muangthai Capital Public on September 14, 2024 and sell it today you would earn a total of  1,344  from holding Muangthai Capital Public or generate 37.01% return on investment over 90 days.

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

Infraset Public  vs.  Muangthai Capital Public

Infraset Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Infraset Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Infraset Public sustained solid returns over the last few months and may actually be approaching a breakup point.

Muangthai Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Muangthai Capital Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Muangthai Capital is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Infraset Public and Muangthai Capital

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

The idea behind Infraset Public and Muangthai Capital 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.