Correlation Between Bangkok Expressway and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both Bangkok Expressway and Chiangmai Frozen 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 Bangkok Expressway and Chiangmai Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Expressway and and Chiangmai Frozen Foods, you can compare the effects of market volatilities on Bangkok Expressway and Chiangmai Frozen 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 Bangkok Expressway with a short position of Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Expressway and Chiangmai Frozen.
Diversification Opportunities for Bangkok Expressway and Chiangmai Frozen
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bangkok and Chiangmai is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Expressway and and Chiangmai Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiangmai Frozen Foods and Bangkok Expressway 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 Bangkok Expressway and are associated (or correlated) with Chiangmai Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiangmai Frozen Foods has no effect on the direction of Bangkok Expressway i.e., Bangkok Expressway and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between Bangkok Expressway and Chiangmai Frozen
Assuming the 90 days trading horizon Bangkok Expressway and is expected to under-perform the Chiangmai Frozen. But the stock apears to be less risky and, when comparing its historical volatility, Bangkok Expressway and is 126.06 times less risky than Chiangmai Frozen. The stock trades about -0.06 of its potential returns per unit of risk. The Chiangmai Frozen Foods is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Chiangmai Frozen Foods on September 2, 2024 and sell it today you would lose (28.00) from holding Chiangmai Frozen Foods or give up 12.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bangkok Expressway and vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| Bangkok Expressway and |
| Chiangmai Frozen Foods |
Bangkok Expressway and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Expressway and Chiangmai Frozen
The main advantage of trading using opposite Bangkok Expressway and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Expressway position performs unexpectedly, Chiangmai Frozen 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 Chiangmai Frozen will offset losses from the drop in Chiangmai Frozen's long position.| Bangkok Expressway vs. BTS Group Holdings | Bangkok Expressway vs. Bangkok Dusit Medical | Bangkok Expressway vs. Airports of Thailand | Bangkok Expressway vs. CP ALL Public |
| Chiangmai Frozen vs. MK Restaurant Group | Chiangmai Frozen vs. TRC Construction Public | Chiangmai Frozen vs. Bangkok Expressway and | Chiangmai Frozen 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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