Function to create a custom related post list by tag and category

functions.php

<?php
  /**
   * Related Posts.
   *
   * Usage:
   * To show related by categories:
   * Add in single.php <?php chr_related_posts(); ?>
   * To show related by tags:
   * Add in single.php <?php chr_related_posts( 'tag' ); ?>
   *
   * @since  1.0.0
   *
   * @global array $post         WP global post.
   *
   * @param  string $display      Set category or tag.
   * @param  int    $qty          Number of posts to be displayed (default 4).
   * @param  string $title        Set the widget title.
   * @param  bool   $thumb        Enable or disable displaying images (default true).
   * @param  string $post_type    Post type (default post).
   *
   * @return string              Related Posts.
   */
  function chr_related_posts( $display = 'category', $qty = 4, $title = '', $thumb = true, $post_type = 'post' ) {
    global $post;

    $show = false;
    $post_qty = (int) $qty;
    ! empty( $title ) || $title = __( 'Related Posts', 'your_theme' );

    // Creates arguments for WP_Query.
    switch ( $display ) {
      case 'tag':
        $tags = wp_get_post_tags( $post->ID );

        if ( $tags ) {
          // Enables the display.
          $show = true;

          $tag_ids = array();
          foreach ( $tags as $tag ) {
            $tag_ids[] = $tag->term_id;
          }

          $args = array(
            'tag__in' => $tag_ids,
            'post__not_in' => array( $post->ID ),
            'posts_per_page' => $post_qty,
            'post_type' => $post_type,
            'ignore_sticky_posts' => 1
          );
        }
        break;

      default :
        $categories = get_the_category( $post->ID );

        if ( $categories ) {

          // Enables the display.
          $show = true;

          $category_ids = array();
          foreach ( $categories as $category ) {
            $category_ids[] = $category->term_id;
          }

          $args = array(
            'category__in' => $category_ids,
            'post__not_in' => array( $post->ID ),
            'posts_per_page' => $post_qty,
            'post_type' => $post_type,
            'ignore_sticky_posts' => 1,
          );
        }
        break;
    }

    if ( $show ) {

      $related = new WP_Query( $args );
      if ( $related->have_posts() ) {

        $layout = '<div id="related-post">';
        $layout .= '<h3>' . esc_attr( $title ) . '</h3>';
        $layout .= ( $thumb ) ? '<div class="row">' : '<ul>';

        while ( $related->have_posts() ) {
          $related->the_post();

          $layout .= ( $thumb ) ? '<div class="col-md-' . ceil( 12 / $qty ) . '">' : '<li>';

          if ( $thumb ) {
            if ( has_post_thumbnail() ) {
              $img = get_the_post_thumbnail( get_the_ID(), 'thumbnail' );
            } else {
              // Add here your default url image.
              $img = '<img src="' . get_template_directory_uri() . '/assets/images/thumb-placeholder.jpg" alt="' . get_the_title() . '">';
            }
            // Filter to replace the image.
            $image = apply_filters( 'chr_related_posts_thumbnail', $img );

            $layout .= '<span class="thumb">';
            $layout .= sprintf( '<a href="%s" title="%s" class="thumbnail">%s</a>', esc_url( get_permalink() ), get_the_title(), $image );
            $layout .= '</span>';
          }

          $layout .= '<span class="text">';
          $layout .= sprintf( '<a href="%1$s" title="%2$s">%2$s</a>', esc_url( get_permalink() ), get_the_title() );
          $layout .= '</span>';

          $layout .= ( $thumb ) ? '</div>' : '</li>';
        }

        $layout .= ( $thumb ) ? '</div>' : '</ul>';
        $layout .= '</div>';

        echo $layout;
      }
      wp_reset_postdata();
    }
  }