Correlation Between CHUWIT FARM and ALL ENERGY
Can any of the company-specific risk be diversified away by investing in both CHUWIT FARM and ALL ENERGY 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 CHUWIT FARM and ALL ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHUWIT FARM PUBLIC and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on CHUWIT FARM and ALL ENERGY 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 CHUWIT FARM with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHUWIT FARM and ALL ENERGY.
Diversification Opportunities for CHUWIT FARM and ALL ENERGY
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CHUWIT and ALL is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CHUWIT FARM PUBLIC and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and CHUWIT FARM 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 CHUWIT FARM PUBLIC are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of CHUWIT FARM i.e., CHUWIT FARM and ALL ENERGY go up and down completely randomly.
Pair Corralation between CHUWIT FARM and ALL ENERGY
Assuming the 90 days trading horizon CHUWIT FARM PUBLIC is expected to under-perform the ALL ENERGY. In addition to that, CHUWIT FARM is 1.4 times more volatile than ALL ENERGY UTILITIES. It trades about -0.06 of its total potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about -0.07 per unit of volatility. If you would invest 74.00 in ALL ENERGY UTILITIES on August 31, 2024 and sell it today you would lose (55.00) from holding ALL ENERGY UTILITIES or give up 74.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 26.19% |
| Values | Daily Returns |
CHUWIT FARM PUBLIC vs. ALL ENERGY UTILITIES
Performance |
| Timeline |
| CHUWIT FARM PUBLIC |
| ALL ENERGY UTILITIES |
CHUWIT FARM and ALL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHUWIT FARM and ALL ENERGY
The main advantage of trading using opposite CHUWIT FARM and ALL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHUWIT FARM position performs unexpectedly, ALL ENERGY 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 ALL ENERGY will offset losses from the drop in ALL ENERGY's long position.| CHUWIT FARM vs. AP Public | CHUWIT FARM vs. TRC Construction Public | CHUWIT FARM vs. Bangkok Expressway and | CHUWIT FARM vs. Lohakit Metal Public |
| ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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