Correlation Between AEON Thana and Chayo Group

Can any of the company-specific risk be diversified away by investing in both AEON Thana and Chayo 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 AEON Thana and Chayo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for AEON Thana and Chayo Group

0.88

Correlation Coefficient

AEON Thana  Chayo Group

Very poor diversification

The 3 months correlation between AEON and Chayo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding AEON Thana Sinsap and Chayo Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chayo Group Public and AEON Thana 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 AEON Thana Sinsap are associated (or correlated) with Chayo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chayo Group Public has no effect on the direction of AEON Thana i.e., AEON Thana and Chayo Group go up and down completely randomly.

Pair Corralation between AEON Thana and Chayo Group

Assuming the 90 days trading horizon AEON Thana Sinsap is expected to under-perform the Chayo Group. But the stock apears to be less risky and, when comparing its historical volatility, AEON Thana Sinsap is 1.97 times less risky than Chayo Group. The stock trades about -0.2 of its potential returns per unit of risk. The Chayo Group Public is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  236.00  in Chayo Group Public on December 4, 2024 and sell it today you would lose (20.00) from holding Chayo Group Public or give up 8.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.24%
Values	Daily Returns

AEON Thana Sinsap  vs.  Chayo Group Public

AEON Thana Sinsap

Risk-Adjusted Performance

Very Weak

Over the last 90 days AEON Thana Sinsap 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 basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Chayo Group Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chayo Group 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 drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AEON Thana and Chayo Group

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

The idea behind AEON Thana Sinsap and Chayo 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.