Correlation Between Charan Insurance and TOA PAINT
Can any of the company-specific risk be diversified away by investing in both Charan Insurance and TOA PAINT 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 TOA PAINT 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 TOA PAINT, you can compare the effects of market volatilities on Charan Insurance and TOA PAINT 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 TOA PAINT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charan Insurance and TOA PAINT.
Diversification Opportunities for Charan Insurance and TOA PAINT
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charan and TOA is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Charan Insurance Public and TOA PAINT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOA PAINT 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 TOA PAINT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOA PAINT has no effect on the direction of Charan Insurance i.e., Charan Insurance and TOA PAINT go up and down completely randomly.
Pair Corralation between Charan Insurance and TOA PAINT
Assuming the 90 days trading horizon Charan Insurance Public is expected to generate 19.13 times more return on investment than TOA PAINT. However, Charan Insurance is 19.13 times more volatile than TOA PAINT. It trades about 0.04 of its potential returns per unit of risk. TOA PAINT is currently generating about -0.05 per unit of risk. If you would invest 2,500 in Charan Insurance Public on September 14, 2024 and sell it today you would lose (320.00) from holding Charan Insurance Public or give up 12.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charan Insurance Public vs. TOA PAINT
Performance |
| Timeline |
| Charan Insurance Public |
| TOA PAINT |
Charan Insurance and TOA PAINT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charan Insurance and TOA PAINT
The main advantage of trading using opposite Charan Insurance and TOA PAINT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charan Insurance position performs unexpectedly, TOA PAINT 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 TOA PAINT will offset losses from the drop in TOA PAINT's long position.| Charan Insurance vs. Lohakit Metal Public | Charan Insurance vs. TRV Rubber Products | Charan Insurance vs. WHA Utilities and | Charan Insurance vs. Symphony Communication Public |
| TOA PAINT vs. Interlink Communication Public | TOA PAINT vs. Turnkey Communication Services | TOA PAINT vs. Krung Thai Bank | TOA PAINT vs. Charan Insurance 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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