Correlation Between Cho Thavee and CI Group

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

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

Diversification Opportunities for Cho Thavee and CI Group

0.35

Correlation Coefficient

Cho Thavee  CI Group

Weak diversification

The 3 months correlation between Cho and CIG is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cho Thavee Public and CI Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Group Public and Cho Thavee 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 Cho Thavee Public are associated (or correlated) with CI Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Group Public has no effect on the direction of Cho Thavee i.e., Cho Thavee and CI Group go up and down completely randomly.

Pair Corralation between Cho Thavee and CI Group

Assuming the 90 days trading horizon Cho Thavee Public is expected to generate 1.08 times more return on investment than CI Group. However, Cho Thavee is 1.08 times more volatile than CI Group Public. It trades about 0.08 of its potential returns per unit of risk. CI Group Public is currently generating about 0.04 per unit of risk. If you would invest  4.00  in Cho Thavee Public on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Cho Thavee Public or generate 0.0% return on investment over 90 days.

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

Cho Thavee Public  vs.  CI Group Public

Cho Thavee Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cho Thavee Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Cho Thavee disclosed solid returns over the last few months and may actually be approaching a breakup point.

CI Group Public

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CI Group Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, CI Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cho Thavee and CI Group

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

The idea behind Cho Thavee Public and CI 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.