Correlation Between CH Karnchang and Ratchthani Leasing
Can any of the company-specific risk be diversified away by investing in both CH Karnchang and Ratchthani 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 CH Karnchang and Ratchthani Leasing 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 Ratchthani Leasing Public, you can compare the effects of market volatilities on CH Karnchang and Ratchthani 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 CH Karnchang with a short position of Ratchthani Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CH Karnchang and Ratchthani Leasing.
Diversification Opportunities for CH Karnchang and Ratchthani Leasing
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CH Karnchang and Ratchthani is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CH Karnchang Public and Ratchthani Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratchthani Leasing 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 Ratchthani Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratchthani Leasing Public has no effect on the direction of CH Karnchang i.e., CH Karnchang and Ratchthani Leasing go up and down completely randomly.
Pair Corralation between CH Karnchang and Ratchthani Leasing
Assuming the 90 days horizon CH Karnchang Public is expected to generate 0.56 times more return on investment than Ratchthani Leasing. However, CH Karnchang Public is 1.77 times less risky than Ratchthani Leasing. It trades about -0.14 of its potential returns per unit of risk. Ratchthani Leasing Public is currently generating about -0.2 per unit of risk. If you would invest 1,920 in CH Karnchang Public on September 1, 2024 and sell it today you would lose (100.00) from holding CH Karnchang Public or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CH Karnchang Public vs. Ratchthani Leasing Public
Performance |
| Timeline |
| CH Karnchang Public |
| Ratchthani Leasing Public |
CH Karnchang and Ratchthani Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CH Karnchang and Ratchthani Leasing
The main advantage of trading using opposite CH Karnchang and Ratchthani Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Karnchang position performs unexpectedly, Ratchthani 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 Ratchthani Leasing will offset losses from the drop in Ratchthani Leasing's long position.| CH Karnchang vs. Gulf Energy Development | CH Karnchang vs. Energy Absolute Public | CH Karnchang vs. WHA Public | CH Karnchang vs. Bangkok Expressway and |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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