Correlation Between Business Online and CHAOSUA FOODS
Can any of the company-specific risk be diversified away by investing in both Business Online and CHAOSUA FOODS 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 Business Online and CHAOSUA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Business Online PCL and CHAOSUA FOODS INDUSTRY, you can compare the effects of market volatilities on Business Online and CHAOSUA FOODS 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 Business Online with a short position of CHAOSUA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Business Online and CHAOSUA FOODS.
Diversification Opportunities for Business Online and CHAOSUA FOODS
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Business and CHAOSUA is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Business Online PCL and CHAOSUA FOODS INDUSTRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHAOSUA FOODS INDUSTRY and Business Online 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 Business Online PCL are associated (or correlated) with CHAOSUA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHAOSUA FOODS INDUSTRY has no effect on the direction of Business Online i.e., Business Online and CHAOSUA FOODS go up and down completely randomly.
Pair Corralation between Business Online and CHAOSUA FOODS
Assuming the 90 days trading horizon Business Online PCL is expected to generate 0.58 times more return on investment than CHAOSUA FOODS. However, Business Online PCL is 1.72 times less risky than CHAOSUA FOODS. It trades about -0.05 of its potential returns per unit of risk. CHAOSUA FOODS INDUSTRY is currently generating about -0.18 per unit of risk. If you would invest 961.00 in Business Online PCL on September 3, 2024 and sell it today you would lose (401.00) from holding Business Online PCL or give up 41.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 20.7% |
| Values | Daily Returns |
Business Online PCL vs. CHAOSUA FOODS INDUSTRY
Performance |
| Timeline |
| Business Online PCL |
| CHAOSUA FOODS INDUSTRY |
Business Online and CHAOSUA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Business Online and CHAOSUA FOODS
The main advantage of trading using opposite Business Online and CHAOSUA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Business Online position performs unexpectedly, CHAOSUA FOODS 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 CHAOSUA FOODS will offset losses from the drop in CHAOSUA FOODS's long position.| Business Online vs. Moong Pattana International | Business Online vs. Premier Technology Public | Business Online vs. Sea Oil Public | Business Online vs. Thai Mitsuwa Public |
| CHAOSUA FOODS vs. Peerapat Technology Public | CHAOSUA FOODS vs. AIM Industrial Growth | CHAOSUA FOODS vs. AddTech Hub Public | CHAOSUA FOODS vs. President Automobile Industries |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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