Correlation Between CH Karnchang and Dynasty Ceramic
Can any of the company-specific risk be diversified away by investing in both CH Karnchang and Dynasty Ceramic 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 CH Karnchang and Dynasty Ceramic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CH Karnchang Public and Dynasty Ceramic Public, you can compare the effects of market volatilities on CH Karnchang and Dynasty Ceramic 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 CH Karnchang with a short position of Dynasty Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of CH Karnchang and Dynasty Ceramic.
Diversification Opportunities for CH Karnchang and Dynasty Ceramic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CH Karnchang and Dynasty is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CH Karnchang Public and Dynasty Ceramic Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynasty Ceramic Public and CH Karnchang 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 CH Karnchang Public are associated (or correlated) with Dynasty Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynasty Ceramic Public has no effect on the direction of CH Karnchang i.e., CH Karnchang and Dynasty Ceramic go up and down completely randomly.
Pair Corralation between CH Karnchang and Dynasty Ceramic
Assuming the 90 days horizon CH Karnchang Public is expected to under-perform the Dynasty Ceramic. In addition to that, CH Karnchang is 1.31 times more volatile than Dynasty Ceramic Public. It trades about -0.24 of its total potential returns per unit of risk. Dynasty Ceramic Public is currently generating about -0.26 per unit of volatility. If you would invest 171.00 in Dynasty Ceramic Public on November 4, 2024 and sell it today you would lose (14.00) from holding Dynasty Ceramic Public or give up 8.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CH Karnchang Public vs. Dynasty Ceramic Public
Performance |
| Timeline |
| CH Karnchang Public |
| Dynasty Ceramic Public |
CH Karnchang and Dynasty Ceramic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CH Karnchang and Dynasty Ceramic
The main advantage of trading using opposite CH Karnchang and Dynasty Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Karnchang position performs unexpectedly, Dynasty Ceramic 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 Dynasty Ceramic will offset losses from the drop in Dynasty Ceramic's long position.| CH Karnchang vs. Italian Thai Development Public | CH Karnchang vs. Charoen Pokphand Foods | CH Karnchang vs. Land and Houses | CH Karnchang vs. Bangkok Bank Public |
| Dynasty Ceramic vs. Land and Houses | Dynasty Ceramic vs. AP Public | Dynasty Ceramic vs. Charoen Pokphand Foods | Dynasty Ceramic vs. Hana Microelectronics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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