Correlation Between Jasmine International and Italian Thai

Can any of the company-specific risk be diversified away by investing in both Jasmine International and Italian Thai 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 Jasmine International and Italian Thai into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Jasmine International and Italian Thai

0.48

Correlation Coefficient

Jasmine International  Italian Thai

Very weak diversification

The 3 months correlation between Jasmine and Italian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jasmine International Public and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop and Jasmine International 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 Jasmine International Public are associated (or correlated) with Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of Jasmine International i.e., Jasmine International and Italian Thai go up and down completely randomly.

Pair Corralation between Jasmine International and Italian Thai

Assuming the 90 days trading horizon Jasmine International Public is expected to under-perform the Italian Thai. But the stock apears to be less risky and, when comparing its historical volatility, Jasmine International Public is 1.39 times less risky than Italian Thai. The stock trades about -0.19 of its potential returns per unit of risk. The Italian Thai Development Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  48.00  in Italian Thai Development Public on October 23, 2024 and sell it today you would lose (1.00) from holding Italian Thai Development Public or give up 2.08% of portfolio value over 90 days.

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

Jasmine International Public  vs.  Italian Thai Development Publi

Jasmine International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jasmine International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Jasmine International and Italian Thai

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

The idea behind Jasmine International Public and Italian Thai Development 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.