Correlation Between CH Karnchang and Fine Metal
Can any of the company-specific risk be diversified away by investing in both CH Karnchang and Fine Metal 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 CH Karnchang and Fine Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CH Karnchang Public and Fine Metal Technologies, you can compare the effects of market volatilities on CH Karnchang and Fine Metal 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 CH Karnchang with a short position of Fine Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CH Karnchang and Fine Metal.
Diversification Opportunities for CH Karnchang and Fine Metal
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CH Karnchang and Fine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CH Karnchang Public and Fine Metal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Metal Technologies and CH Karnchang 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 CH Karnchang Public are associated (or correlated) with Fine Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Metal Technologies has no effect on the direction of CH Karnchang i.e., CH Karnchang and Fine Metal go up and down completely randomly.
Pair Corralation between CH Karnchang and Fine Metal
Assuming the 90 days horizon CH Karnchang Public is expected to generate 1.24 times more return on investment than Fine Metal. However, CH Karnchang is 1.24 times more volatile than Fine Metal Technologies. It trades about 0.05 of its potential returns per unit of risk. Fine Metal Technologies is currently generating about -0.01 per unit of risk. If you would invest 1,840 in CH Karnchang Public on September 26, 2024 and sell it today you would earn a total of 30.00 from holding CH Karnchang Public or generate 1.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CH Karnchang Public vs. Fine Metal Technologies
Performance |
Timeline |
CH Karnchang Public |
Fine Metal Technologies |
CH Karnchang and Fine Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CH Karnchang and Fine Metal
The main advantage of trading using opposite CH Karnchang and Fine Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Karnchang position performs unexpectedly, Fine Metal 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 Fine Metal will offset losses from the drop in Fine Metal's long position.CH Karnchang vs. Land and Houses | CH Karnchang vs. Krung Thai Bank | CH Karnchang vs. Bangkok Bank Public | CH Karnchang vs. The Siam Cement |
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Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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