Correlation Between Chin Huay and AEON Thana
Can any of the company-specific risk be diversified away by investing in both Chin Huay and AEON Thana 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 Chin Huay and AEON Thana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chin Huay PCL and AEON Thana Sinsap, you can compare the effects of market volatilities on Chin Huay and AEON Thana 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 Chin Huay with a short position of AEON Thana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chin Huay and AEON Thana.
Diversification Opportunities for Chin Huay and AEON Thana
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chin and AEON is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chin Huay PCL and AEON Thana Sinsap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON Thana Sinsap and Chin Huay 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 Chin Huay PCL are associated (or correlated) with AEON Thana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON Thana Sinsap has no effect on the direction of Chin Huay i.e., Chin Huay and AEON Thana go up and down completely randomly.
Pair Corralation between Chin Huay and AEON Thana
Assuming the 90 days horizon Chin Huay PCL is expected to under-perform the AEON Thana. But the stock apears to be less risky and, when comparing its historical volatility, Chin Huay PCL is 1.19 times less risky than AEON Thana. The stock trades about -0.03 of its potential returns per unit of risk. The AEON Thana Sinsap is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 14,361 in AEON Thana Sinsap on September 5, 2024 and sell it today you would lose (1,861) from holding AEON Thana Sinsap or give up 12.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Chin Huay PCL vs. AEON Thana Sinsap
Performance |
| Timeline |
| Chin Huay PCL |
| AEON Thana Sinsap |
Chin Huay and AEON Thana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chin Huay and AEON Thana
The main advantage of trading using opposite Chin Huay and AEON Thana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chin Huay position performs unexpectedly, AEON Thana 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 AEON Thana will offset losses from the drop in AEON Thana's long position.| Chin Huay vs. Kingsmen CMTI Public | Chin Huay vs. Hydrotek Public | Chin Huay vs. Karmarts Public | Chin Huay vs. KC Metalsheet Public |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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