Correlation Between Chiangmai Frozen and Bualuang Office

Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and Bualuang Office 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 Chiangmai Frozen and Bualuang Office into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chiangmai Frozen Foods and Bualuang Office Leasehold, you can compare the effects of market volatilities on Chiangmai Frozen and Bualuang Office 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 Chiangmai Frozen with a short position of Bualuang Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and Bualuang Office.

Diversification Opportunities for Chiangmai Frozen and Bualuang Office

-0.43

Correlation Coefficient

Chiangmai Frozen  Bualuang Office

Very good diversification

The 3 months correlation between Chiangmai and Bualuang is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and Bualuang Office Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bualuang Office Leasehold and Chiangmai Frozen 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 Chiangmai Frozen Foods are associated (or correlated) with Bualuang Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bualuang Office Leasehold has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and Bualuang Office go up and down completely randomly.

Pair Corralation between Chiangmai Frozen and Bualuang Office

Assuming the 90 days horizon Chiangmai Frozen Foods is expected to generate 9.92 times more return on investment than Bualuang Office. However, Chiangmai Frozen is 9.92 times more volatile than Bualuang Office Leasehold. It trades about 0.04 of its potential returns per unit of risk. Bualuang Office Leasehold is currently generating about -0.06 per unit of risk. If you would invest  264.00  in Chiangmai Frozen Foods on October 11, 2024 and sell it today you would lose (74.00) from holding Chiangmai Frozen Foods or give up 28.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.04%
Values	Daily Returns

Chiangmai Frozen Foods  vs.  Bualuang Office Leasehold

Chiangmai Frozen Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chiangmai Frozen Foods 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 quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bualuang Office Leasehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bualuang Office Leasehold 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Chiangmai Frozen and Bualuang Office

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

The idea behind Chiangmai Frozen Foods and Bualuang Office Leasehold 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.