Correlation Between CHAOSUA FOODS and SAF Special
Can any of the company-specific risk be diversified away by investing in both CHAOSUA FOODS and SAF Special 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 CHAOSUA FOODS and SAF Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHAOSUA FOODS INDUSTRY and SAF Special Steel, you can compare the effects of market volatilities on CHAOSUA FOODS and SAF Special 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 CHAOSUA FOODS with a short position of SAF Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHAOSUA FOODS and SAF Special.
Diversification Opportunities for CHAOSUA FOODS and SAF Special
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CHAOSUA and SAF is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CHAOSUA FOODS INDUSTRY and SAF Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Special Steel and CHAOSUA FOODS 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 CHAOSUA FOODS INDUSTRY are associated (or correlated) with SAF Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Special Steel has no effect on the direction of CHAOSUA FOODS i.e., CHAOSUA FOODS and SAF Special go up and down completely randomly.
Pair Corralation between CHAOSUA FOODS and SAF Special
Assuming the 90 days trading horizon CHAOSUA FOODS INDUSTRY is expected to under-perform the SAF Special. But the stock apears to be less risky and, when comparing its historical volatility, CHAOSUA FOODS INDUSTRY is 1.12 times less risky than SAF Special. The stock trades about -0.18 of its potential returns per unit of risk. The SAF Special Steel is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 273.00 in SAF Special Steel on September 3, 2024 and sell it today you would lose (218.00) from holding SAF Special Steel or give up 79.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 21.88% |
| Values | Daily Returns |
CHAOSUA FOODS INDUSTRY vs. SAF Special Steel
Performance |
| Timeline |
| CHAOSUA FOODS INDUSTRY |
| SAF Special Steel |
CHAOSUA FOODS and SAF Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHAOSUA FOODS and SAF Special
The main advantage of trading using opposite CHAOSUA FOODS and SAF Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHAOSUA FOODS position performs unexpectedly, SAF Special 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 SAF Special will offset losses from the drop in SAF Special's long position.| CHAOSUA FOODS vs. Peerapat Technology Public | CHAOSUA FOODS vs. AIM Industrial Growth | CHAOSUA FOODS vs. AddTech Hub Public | CHAOSUA FOODS vs. President Automobile Industries |
| SAF Special vs. Diamond Building Products | SAF Special vs. MCS Steel Public | SAF Special vs. Asia Green Energy | SAF Special vs. Hwa Fong Rubber |
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.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |