Correlation Between Chamni Eye and Bound
Can any of the company-specific risk be diversified away by investing in both Chamni Eye and Bound 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 Chamni Eye and Bound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chamni Eye PCL and Bound and Beyond, you can compare the effects of market volatilities on Chamni Eye and Bound 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 Chamni Eye with a short position of Bound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chamni Eye and Bound.
Diversification Opportunities for Chamni Eye and Bound
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chamni and Bound is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chamni Eye PCL and Bound and Beyond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bound and Beyond and Chamni Eye 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 Chamni Eye PCL are associated (or correlated) with Bound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bound and Beyond has no effect on the direction of Chamni Eye i.e., Chamni Eye and Bound go up and down completely randomly.
Pair Corralation between Chamni Eye and Bound
Assuming the 90 days trading horizon Chamni Eye PCL is expected to under-perform the Bound. But the stock apears to be less risky and, when comparing its historical volatility, Chamni Eye PCL is 1.19 times less risky than Bound. The stock trades about -0.04 of its potential returns per unit of risk. The Bound and Beyond is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,170 in Bound and Beyond on September 14, 2024 and sell it today you would lose (295.00) from holding Bound and Beyond or give up 25.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Chamni Eye PCL vs. Bound and Beyond
Performance |
| Timeline |
| Chamni Eye PCL |
| Bound and Beyond |
Chamni Eye and Bound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chamni Eye and Bound
The main advantage of trading using opposite Chamni Eye and Bound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chamni Eye position performs unexpectedly, Bound 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 Bound will offset losses from the drop in Bound's long position.| Chamni Eye vs. Bound and Beyond | Chamni Eye vs. Moshi Moshi Retail | Chamni Eye vs. The Erawan Group | Chamni Eye vs. Jay Mart Public |
| Bound vs. BCPG Public | Bound vs. Aqua Public | Bound vs. Energy Absolute Public | Bound vs. Bangkok Aviation Fuel |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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