Correlation Between CHUWIT FARM and Indara Insurance
Can any of the company-specific risk be diversified away by investing in both CHUWIT FARM and Indara Insurance 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 Indara Insurance 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 Indara Insurance Public, you can compare the effects of market volatilities on CHUWIT FARM and Indara Insurance 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 Indara Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHUWIT FARM and Indara Insurance.
Diversification Opportunities for CHUWIT FARM and Indara Insurance
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CHUWIT and Indara is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CHUWIT FARM PUBLIC and Indara Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indara Insurance Public 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 Indara Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indara Insurance Public has no effect on the direction of CHUWIT FARM i.e., CHUWIT FARM and Indara Insurance go up and down completely randomly.
Pair Corralation between CHUWIT FARM and Indara Insurance
Assuming the 90 days trading horizon CHUWIT FARM PUBLIC is expected to under-perform the Indara Insurance. In addition to that, CHUWIT FARM is 1.67 times more volatile than Indara Insurance Public. It trades about -0.03 of its total potential returns per unit of risk. Indara Insurance Public is currently generating about 0.08 per unit of volatility. If you would invest 7,575 in Indara Insurance Public on October 20, 2024 and sell it today you would earn a total of 175.00 from holding Indara Insurance Public or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
CHUWIT FARM PUBLIC vs. Indara Insurance Public
Performance |
| Timeline |
| CHUWIT FARM PUBLIC |
| Indara Insurance Public |
CHUWIT FARM and Indara Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHUWIT FARM and Indara Insurance
The main advantage of trading using opposite CHUWIT FARM and Indara Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHUWIT FARM position performs unexpectedly, Indara Insurance 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 Indara Insurance will offset losses from the drop in Indara Insurance's long position.| CHUWIT FARM vs. NC Housing Public | CHUWIT FARM vs. Origin Property PCL | CHUWIT FARM vs. Property Perfect Public | CHUWIT FARM vs. Britania PCL |
| Indara Insurance vs. IFS Capital Public | Indara Insurance vs. Internet Thailand Public | Indara Insurance vs. Hwa Fong Rubber | Indara Insurance vs. Haad Thip 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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