Correlation Between Boutique Newcity and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both Boutique Newcity 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 Boutique Newcity and Chiangmai Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boutique Newcity Public and Chiangmai Frozen Foods, you can compare the effects of market volatilities on Boutique Newcity 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 Boutique Newcity with a short position of Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boutique Newcity and Chiangmai Frozen.
Diversification Opportunities for Boutique Newcity and Chiangmai Frozen
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Boutique and Chiangmai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Boutique Newcity Public 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 Boutique Newcity 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 Boutique Newcity Public 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 Boutique Newcity i.e., Boutique Newcity and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between Boutique Newcity and Chiangmai Frozen
Assuming the 90 days trading horizon Boutique Newcity Public is expected to generate 1.01 times more return on investment than Chiangmai Frozen. However, Boutique Newcity is 1.01 times more volatile than Chiangmai Frozen Foods. It trades about 0.04 of its potential returns per unit of risk. Chiangmai Frozen Foods is currently generating about 0.04 per unit of risk. If you would invest 1,380 in Boutique Newcity Public on December 1, 2024 and sell it today you would lose (150.00) from holding Boutique Newcity Public or give up 10.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boutique Newcity Public vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| Boutique Newcity Public |
| Chiangmai Frozen Foods |
Boutique Newcity and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boutique Newcity and Chiangmai Frozen
The main advantage of trading using opposite Boutique Newcity and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boutique Newcity 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.| Boutique Newcity vs. Asia Fiber Public | Boutique Newcity vs. AJ Plast Public | Boutique Newcity vs. Castle Peak Holdings | Boutique Newcity vs. CPL Group Public |
| Chiangmai Frozen vs. Chumporn Palm Oil | Chiangmai Frozen vs. GFPT Public | Chiangmai Frozen vs. Crown Seal Public | Chiangmai Frozen vs. Dynasty Ceramic 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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