Correlation Between Charan Insurance and Amanah Leasing
Can any of the company-specific risk be diversified away by investing in both Charan Insurance and Amanah Leasing 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 Charan Insurance and Amanah Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charan Insurance Public and Amanah Leasing Public, you can compare the effects of market volatilities on Charan Insurance and Amanah Leasing 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 Charan Insurance with a short position of Amanah Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charan Insurance and Amanah Leasing.
Diversification Opportunities for Charan Insurance and Amanah Leasing
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charan and Amanah is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Charan Insurance Public and Amanah Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanah Leasing Public and Charan Insurance 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 Charan Insurance Public are associated (or correlated) with Amanah Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanah Leasing Public has no effect on the direction of Charan Insurance i.e., Charan Insurance and Amanah Leasing go up and down completely randomly.
Pair Corralation between Charan Insurance and Amanah Leasing
Assuming the 90 days trading horizon Charan Insurance Public is expected to generate 1.29 times more return on investment than Amanah Leasing. However, Charan Insurance is 1.29 times more volatile than Amanah Leasing Public. It trades about 0.03 of its potential returns per unit of risk. Amanah Leasing Public is currently generating about -0.18 per unit of risk. If you would invest 2,080 in Charan Insurance Public on October 23, 2024 and sell it today you would earn a total of 20.00 from holding Charan Insurance Public or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charan Insurance Public vs. Amanah Leasing Public
Performance |
| Timeline |
| Charan Insurance Public |
| Amanah Leasing Public |
Charan Insurance and Amanah Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charan Insurance and Amanah Leasing
The main advantage of trading using opposite Charan Insurance and Amanah Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charan Insurance position performs unexpectedly, Amanah Leasing 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 Amanah Leasing will offset losses from the drop in Amanah Leasing's long position.| Charan Insurance vs. Phatra Leasing Public | Charan Insurance vs. Micro Leasing Public | Charan Insurance vs. Namwiwat Medical | Charan Insurance vs. Bhiraj Office Leasehold |
| Amanah Leasing vs. Srisawad Power 1979 | Amanah Leasing vs. JMT Network Services | Amanah Leasing vs. AEON Thana Sinsap | Amanah Leasing vs. Ratchthani Leasing 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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