Correlation Between Sahamit Machinery and CH Karnchang

Can any of the company-specific risk be diversified away by investing in both Sahamit Machinery and CH Karnchang 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 Sahamit Machinery and CH Karnchang into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Sahamit Machinery and CH Karnchang

0.3

Correlation Coefficient

Sahamit Machinery  CH Karnchang

Weak diversification

The 3 months correlation between Sahamit and CH Karnchang is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sahamit Machinery Public and CH Karnchang Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Karnchang Public and Sahamit Machinery 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 Sahamit Machinery Public are associated (or correlated) with CH Karnchang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Karnchang Public has no effect on the direction of Sahamit Machinery i.e., Sahamit Machinery and CH Karnchang go up and down completely randomly.

Pair Corralation between Sahamit Machinery and CH Karnchang

Assuming the 90 days trading horizon Sahamit Machinery Public is expected to generate 0.28 times more return on investment than CH Karnchang. However, Sahamit Machinery Public is 3.57 times less risky than CH Karnchang. It trades about -0.33 of its potential returns per unit of risk. CH Karnchang Public is currently generating about -0.32 per unit of risk. If you would invest  402.00  in Sahamit Machinery Public on October 13, 2024 and sell it today you would lose (14.00) from holding Sahamit Machinery Public or give up 3.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Sahamit Machinery Public  vs.  CH Karnchang Public

Sahamit Machinery Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sahamit Machinery Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

CH Karnchang Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CH Karnchang Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Pair Trading with Sahamit Machinery and CH Karnchang

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

The idea behind Sahamit Machinery Public and CH Karnchang 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.