Correlation Between Italian Thai and MC Group

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

Diversification Opportunities for Italian Thai and MC Group

0.74

Correlation Coefficient

Italian Thai  MC Group

Poor diversification

The 3 months correlation between Italian and MC Group is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Italian Thai Development Publi and MC Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Group 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 MC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Group Public has no effect on the direction of Italian Thai i.e., Italian Thai and MC Group go up and down completely randomly.

Pair Corralation between Italian Thai and MC Group

Assuming the 90 days trading horizon Italian Thai Development Public is expected to under-perform the MC Group. In addition to that, Italian Thai is 2.01 times more volatile than MC Group Public. It trades about -0.12 of its total potential returns per unit of risk. MC Group Public is currently generating about -0.04 per unit of volatility. If you would invest  1,141  in MC Group Public on September 13, 2024 and sell it today you would lose (51.00) from holding MC Group Public or give up 4.47% of portfolio value over 90 days.

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

Italian Thai Development Publi  vs.  MC Group 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.

MC Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Italian Thai and MC Group

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

The idea behind Italian Thai Development Public and MC Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..