Correlation Between Bound and Chamni Eye
Can any of the company-specific risk be diversified away by investing in both Bound and Chamni Eye 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 Bound and Chamni Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bound and Beyond and Chamni Eye PCL, you can compare the effects of market volatilities on Bound and Chamni Eye 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 Bound with a short position of Chamni Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bound and Chamni Eye.
Diversification Opportunities for Bound and Chamni Eye
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bound and Chamni is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bound and Beyond and Chamni Eye PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chamni Eye PCL and Bound 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 Bound and Beyond are associated (or correlated) with Chamni Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chamni Eye PCL has no effect on the direction of Bound i.e., Bound and Chamni Eye go up and down completely randomly.
Pair Corralation between Bound and Chamni Eye
Assuming the 90 days trading horizon Bound and Beyond is expected to generate 1.23 times more return on investment than Chamni Eye. However, Bound is 1.23 times more volatile than Chamni Eye PCL. It trades about 0.01 of its potential returns per unit of risk. Chamni Eye PCL is currently generating about -0.4 per unit of risk. If you would invest 840.00 in Bound and Beyond on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Bound and Beyond or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bound and Beyond vs. Chamni Eye PCL
Performance |
| Timeline |
| Bound and Beyond |
| Chamni Eye PCL |
Bound and Chamni Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bound and Chamni Eye
The main advantage of trading using opposite Bound and Chamni Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bound position performs unexpectedly, Chamni Eye 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 Chamni Eye will offset losses from the drop in Chamni Eye's long position.| Bound vs. Delta Electronics Public | Bound vs. Delta Electronics Public | Bound vs. Airports of Thailand | Bound vs. Airports of Thailand |
| Chamni Eye vs. Bound and Beyond | Chamni Eye vs. Moshi Moshi Retail | Chamni Eye vs. The Erawan Group | Chamni Eye vs. Jay Mart 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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