Correlation Between SiS Distribution and Internet Thailand

Can any of the company-specific risk be diversified away by investing in both SiS Distribution and Internet Thailand 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 SiS Distribution and Internet Thailand into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for SiS Distribution and Internet Thailand

0.67

Correlation Coefficient

SiS Distribution  Internet Thailand

Poor diversification

The 3 months correlation between SiS and Internet is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SiS Distribution Public and Internet Thailand Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand Public and SiS Distribution 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 SiS Distribution Public are associated (or correlated) with Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand Public has no effect on the direction of SiS Distribution i.e., SiS Distribution and Internet Thailand go up and down completely randomly.

Pair Corralation between SiS Distribution and Internet Thailand

Assuming the 90 days trading horizon SiS Distribution Public is expected to under-perform the Internet Thailand. But the stock apears to be less risky and, when comparing its historical volatility, SiS Distribution Public is 1.55 times less risky than Internet Thailand. The stock trades about -0.21 of its potential returns per unit of risk. The Internet Thailand Public is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  550.00  in Internet Thailand Public on October 24, 2024 and sell it today you would lose (45.00) from holding Internet Thailand Public or give up 8.18% of portfolio value over 90 days.

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

SiS Distribution Public  vs.  Internet Thailand Public

SiS Distribution Public

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SiS Distribution Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SiS Distribution is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Internet Thailand Public

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Internet Thailand Public are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Internet Thailand disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SiS Distribution and Internet Thailand

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

The idea behind SiS Distribution Public and Internet Thailand 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.