Correlation Between Chayo Group and Srisawad Power

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

By analyzing existing cross correlation between Chayo Group Public and Srisawad Power 1979, you can compare the effects of market volatilities on Chayo Group and Srisawad Power 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 Chayo Group with a short position of Srisawad Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chayo Group and Srisawad Power.

Diversification Opportunities for Chayo Group and Srisawad Power

0.77

Correlation Coefficient

Chayo Group  Srisawad Power

Poor diversification

The 3 months correlation between Chayo and Srisawad is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chayo Group Public and Srisawad Power 1979 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Srisawad Power 1979 and Chayo Group 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 Chayo Group Public are associated (or correlated) with Srisawad Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Srisawad Power 1979 has no effect on the direction of Chayo Group i.e., Chayo Group and Srisawad Power go up and down completely randomly.

Pair Corralation between Chayo Group and Srisawad Power

Assuming the 90 days trading horizon Chayo Group Public is expected to under-perform the Srisawad Power. In addition to that, Chayo Group is 1.0 times more volatile than Srisawad Power 1979. It trades about -0.18 of its total potential returns per unit of risk. Srisawad Power 1979 is currently generating about -0.07 per unit of volatility. If you would invest  3,925  in Srisawad Power 1979 on December 4, 2024 and sell it today you would lose (575.00) from holding Srisawad Power 1979 or give up 14.65% of portfolio value over 90 days.

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

Chayo Group Public  vs.  Srisawad Power 1979

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.

Srisawad Power 1979

Risk-Adjusted Performance

Very Weak

Over the last 90 days Srisawad Power 1979 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 Chayo Group and Srisawad Power

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

The idea behind Chayo Group Public and Srisawad Power 1979 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.