Correlation Between ALL ENERGY and CHUWIT FARM
Can any of the company-specific risk be diversified away by investing in both ALL ENERGY and CHUWIT FARM 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 ALL ENERGY and CHUWIT FARM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALL ENERGY UTILITIES and CHUWIT FARM PUBLIC, you can compare the effects of market volatilities on ALL ENERGY and CHUWIT FARM 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 ALL ENERGY with a short position of CHUWIT FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALL ENERGY and CHUWIT FARM.
Diversification Opportunities for ALL ENERGY and CHUWIT FARM
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ALL and CHUWIT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ALL ENERGY UTILITIES and CHUWIT FARM PUBLIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHUWIT FARM PUBLIC and ALL ENERGY 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 ALL ENERGY UTILITIES are associated (or correlated) with CHUWIT FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHUWIT FARM PUBLIC has no effect on the direction of ALL ENERGY i.e., ALL ENERGY and CHUWIT FARM go up and down completely randomly.
Pair Corralation between ALL ENERGY and CHUWIT FARM
Assuming the 90 days horizon ALL ENERGY UTILITIES is expected to generate 0.71 times more return on investment than CHUWIT FARM. However, ALL ENERGY UTILITIES is 1.4 times less risky than CHUWIT FARM. It trades about -0.07 of its potential returns per unit of risk. CHUWIT FARM PUBLIC is currently generating about -0.06 per unit of risk. If you would invest 74.00 in ALL ENERGY UTILITIES on August 31, 2024 and sell it today you would lose (55.00) from holding ALL ENERGY UTILITIES or give up 74.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 26.19% |
| Values | Daily Returns |
ALL ENERGY UTILITIES vs. CHUWIT FARM PUBLIC
Performance |
| Timeline |
| ALL ENERGY UTILITIES |
| CHUWIT FARM PUBLIC |
ALL ENERGY and CHUWIT FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALL ENERGY and CHUWIT FARM
The main advantage of trading using opposite ALL ENERGY and CHUWIT FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALL ENERGY position performs unexpectedly, CHUWIT FARM 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 CHUWIT FARM will offset losses from the drop in CHUWIT FARM's long position.| ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY vs. Lohakit Metal Public |
| CHUWIT FARM vs. AP Public | CHUWIT FARM vs. TRC Construction Public | CHUWIT FARM vs. Bangkok Expressway and | CHUWIT FARM vs. Lohakit Metal Public |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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