Correlation Between Asia Fiber and Chumporn Palm
Can any of the company-specific risk be diversified away by investing in both Asia Fiber and Chumporn Palm 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 Asia Fiber and Chumporn Palm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Fiber Public and Chumporn Palm Oil, you can compare the effects of market volatilities on Asia Fiber and Chumporn Palm 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 Asia Fiber with a short position of Chumporn Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Fiber and Chumporn Palm.
Diversification Opportunities for Asia Fiber and Chumporn Palm
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asia and Chumporn is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Asia Fiber Public and Chumporn Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chumporn Palm Oil and Asia Fiber 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 Asia Fiber Public are associated (or correlated) with Chumporn Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chumporn Palm Oil has no effect on the direction of Asia Fiber i.e., Asia Fiber and Chumporn Palm go up and down completely randomly.
Pair Corralation between Asia Fiber and Chumporn Palm
Assuming the 90 days trading horizon Asia Fiber Public is expected to generate 0.61 times more return on investment than Chumporn Palm. However, Asia Fiber Public is 1.65 times less risky than Chumporn Palm. It trades about -0.22 of its potential returns per unit of risk. Chumporn Palm Oil is currently generating about -0.21 per unit of risk. If you would invest 515.00 in Asia Fiber Public on September 1, 2024 and sell it today you would lose (35.00) from holding Asia Fiber Public or give up 6.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Fiber Public vs. Chumporn Palm Oil
Performance |
| Timeline |
| Asia Fiber Public |
| Chumporn Palm Oil |
Asia Fiber and Chumporn Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Fiber and Chumporn Palm
The main advantage of trading using opposite Asia Fiber and Chumporn Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Fiber position performs unexpectedly, Chumporn Palm 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 Chumporn Palm will offset losses from the drop in Chumporn Palm's long position.| Asia Fiber vs. AJ Plast Public | Asia Fiber vs. Aikchol Hospital Public | Asia Fiber vs. Boutique Newcity Public | Asia Fiber vs. Allianz Ayudhya Capital |
| Chumporn Palm vs. MK Restaurant Group | Chumporn Palm vs. TRC Construction Public | Chumporn Palm vs. Bangkok Expressway and | Chumporn Palm 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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