Correlation Between Chiangmai Frozen and City Sports

Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and City Sports 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 City Sports 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 City Sports and, you can compare the effects of market volatilities on Chiangmai Frozen and City Sports 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 City Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and City Sports.

Diversification Opportunities for Chiangmai Frozen and City Sports

-0.9

Correlation Coefficient

Chiangmai Frozen  City Sports

Pay attention - limited upside

The 3 months correlation between Chiangmai and City is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and City Sports and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Sports 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 City Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Sports has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and City Sports go up and down completely randomly.

Pair Corralation between Chiangmai Frozen and City Sports

Assuming the 90 days horizon Chiangmai Frozen is expected to generate 1.03 times less return on investment than City Sports. In addition to that, Chiangmai Frozen is 1.0 times more volatile than City Sports and. It trades about 0.05 of its total potential returns per unit of risk. City Sports and is currently generating about 0.05 per unit of volatility. If you would invest  6,831  in City Sports and on October 6, 2024 and sell it today you would earn a total of  2,144  from holding City Sports and or generate 31.39% return on investment over 90 days.

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

Chiangmai Frozen Foods  vs.  City Sports and

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 latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

City Sports

Risk-Adjusted Performance

42 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in City Sports and are ranked lower than 42 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, City Sports may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chiangmai Frozen and City Sports

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

The idea behind Chiangmai Frozen Foods and City Sports and 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.