Correlation Between CHUWIT FARM and Thai OPP
Can any of the company-specific risk be diversified away by investing in both CHUWIT FARM and Thai OPP 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 Thai OPP 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 Thai OPP Public, you can compare the effects of market volatilities on CHUWIT FARM and Thai OPP 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 Thai OPP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHUWIT FARM and Thai OPP.
Diversification Opportunities for CHUWIT FARM and Thai OPP
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHUWIT and Thai is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CHUWIT FARM PUBLIC and Thai OPP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai OPP 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 Thai OPP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai OPP Public has no effect on the direction of CHUWIT FARM i.e., CHUWIT FARM and Thai OPP go up and down completely randomly.
Pair Corralation between CHUWIT FARM and Thai OPP
Assuming the 90 days trading horizon CHUWIT FARM PUBLIC is expected to under-perform the Thai OPP. But the stock apears to be less risky and, when comparing its historical volatility, CHUWIT FARM PUBLIC is 55.93 times less risky than Thai OPP. The stock trades about -0.29 of its potential returns per unit of risk. The Thai OPP Public is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 16,850 in Thai OPP Public on August 28, 2024 and sell it today you would earn a total of 50.00 from holding Thai OPP Public or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
CHUWIT FARM PUBLIC vs. Thai OPP Public
Performance |
| Timeline |
| CHUWIT FARM PUBLIC |
| Thai OPP Public |
CHUWIT FARM and Thai OPP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHUWIT FARM and Thai OPP
The main advantage of trading using opposite CHUWIT FARM and Thai OPP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHUWIT FARM position performs unexpectedly, Thai OPP 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 Thai OPP will offset losses from the drop in Thai OPP's long position.| CHUWIT FARM vs. Delta Electronics Public | CHUWIT FARM vs. Delta Electronics Public | CHUWIT FARM vs. Airports of Thailand | CHUWIT FARM vs. Airports of Thailand |
| Thai OPP vs. PTT OIL RETAIL | Thai OPP vs. SAF Special Steel | Thai OPP vs. Lotus Retail Growth | Thai OPP vs. CHUWIT FARM 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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