Correlation Between Cho Thavee and Communication System
Can any of the company-specific risk be diversified away by investing in both Cho Thavee and Communication System 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 Communication System 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 Communication System Solution, you can compare the effects of market volatilities on Cho Thavee and Communication System 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 Communication System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cho Thavee and Communication System.
Diversification Opportunities for Cho Thavee and Communication System
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cho and Communication is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cho Thavee Public and Communication System Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication System 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 Communication System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication System has no effect on the direction of Cho Thavee i.e., Cho Thavee and Communication System go up and down completely randomly.
Pair Corralation between Cho Thavee and Communication System
Assuming the 90 days trading horizon Cho Thavee is expected to generate 1.18 times less return on investment than Communication System. In addition to that, Cho Thavee is 1.01 times more volatile than Communication System Solution. It trades about 0.03 of its total potential returns per unit of risk. Communication System Solution is currently generating about 0.04 per unit of volatility. If you would invest 138.00 in Communication System Solution on August 30, 2024 and sell it today you would lose (44.00) from holding Communication System Solution or give up 31.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cho Thavee Public vs. Communication System Solution
Performance |
| Timeline |
| Cho Thavee Public |
| Communication System |
Cho Thavee and Communication System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cho Thavee and Communication System
The main advantage of trading using opposite Cho Thavee and Communication System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cho Thavee position performs unexpectedly, Communication System 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 Communication System will offset losses from the drop in Communication System'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 |
| Communication System vs. MCS Steel Public | Communication System vs. Asia Plus Group | Communication System vs. Lalin Property Public | Communication System vs. Lam Soon 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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