Correlation Between Cho Thavee and Chow Steel
Can any of the company-specific risk be diversified away by investing in both Cho Thavee and Chow Steel 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 Cho Thavee and Chow Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cho Thavee Public and Chow Steel Industries, you can compare the effects of market volatilities on Cho Thavee and Chow Steel 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 Cho Thavee with a short position of Chow Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cho Thavee and Chow Steel.
Diversification Opportunities for Cho Thavee and Chow Steel
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cho and Chow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cho Thavee Public and Chow Steel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chow Steel Industries and Cho Thavee 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 Cho Thavee Public are associated (or correlated) with Chow Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chow Steel Industries has no effect on the direction of Cho Thavee i.e., Cho Thavee and Chow Steel go up and down completely randomly.
Pair Corralation between Cho Thavee and Chow Steel
Assuming the 90 days trading horizon Cho Thavee is expected to generate 1.13 times less return on investment than Chow Steel. In addition to that, Cho Thavee is 1.01 times more volatile than Chow Steel Industries. It trades about 0.03 of its total potential returns per unit of risk. Chow Steel Industries is currently generating about 0.04 per unit of volatility. If you would invest 362.00 in Chow Steel Industries on September 12, 2024 and sell it today you would lose (162.00) from holding Chow Steel Industries or give up 44.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cho Thavee Public vs. Chow Steel Industries
Performance |
| Timeline |
| Cho Thavee Public |
| Chow Steel Industries |
Cho Thavee and Chow Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cho Thavee and Chow Steel
The main advantage of trading using opposite Cho Thavee and Chow Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cho Thavee position performs unexpectedly, Chow Steel 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 Chow Steel will offset losses from the drop in Chow Steel's long position.| Cho Thavee vs. Chewathai Public | Cho Thavee vs. Filter Vision Public | Cho Thavee vs. G Capital Public | Cho Thavee vs. Demco Public |
| Chow Steel vs. Tata Steel Public | Chow Steel vs. G J Steel | Chow Steel vs. POSCO Thainox Public | Chow Steel vs. TMT Steel 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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