Correlation Between Chiangmai Frozen and Boutique Newcity
Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and Boutique Newcity 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 Chiangmai Frozen and Boutique Newcity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiangmai Frozen Foods and Boutique Newcity Public, you can compare the effects of market volatilities on Chiangmai Frozen and Boutique Newcity 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 Chiangmai Frozen with a short position of Boutique Newcity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and Boutique Newcity.
Diversification Opportunities for Chiangmai Frozen and Boutique Newcity
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chiangmai and Boutique is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and Boutique Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boutique Newcity Public and Chiangmai Frozen 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 Chiangmai Frozen Foods are associated (or correlated) with Boutique Newcity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boutique Newcity Public has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and Boutique Newcity go up and down completely randomly.
Pair Corralation between Chiangmai Frozen and Boutique Newcity
Assuming the 90 days horizon Chiangmai Frozen Foods is expected to generate 0.53 times more return on investment than Boutique Newcity. However, Chiangmai Frozen Foods is 1.88 times less risky than Boutique Newcity. It trades about -0.13 of its potential returns per unit of risk. Boutique Newcity Public is currently generating about -0.4 per unit of risk. If you would invest 173.00 in Chiangmai Frozen Foods on December 1, 2024 and sell it today you would lose (6.00) from holding Chiangmai Frozen Foods or give up 3.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiangmai Frozen Foods vs. Boutique Newcity Public
Performance |
| Timeline |
| Chiangmai Frozen Foods |
| Boutique Newcity Public |
Chiangmai Frozen and Boutique Newcity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiangmai Frozen and Boutique Newcity
The main advantage of trading using opposite Chiangmai Frozen and Boutique Newcity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiangmai Frozen position performs unexpectedly, Boutique Newcity 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 Boutique Newcity will offset losses from the drop in Boutique Newcity's long position.| Chiangmai Frozen vs. Chumporn Palm Oil | Chiangmai Frozen vs. GFPT Public | Chiangmai Frozen vs. Crown Seal Public | Chiangmai Frozen vs. Dynasty Ceramic Public |
| Boutique Newcity vs. Asia Fiber Public | Boutique Newcity vs. AJ Plast Public | Boutique Newcity vs. Castle Peak Holdings | Boutique Newcity vs. CPL Group 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 Stocks Directory module to find actively traded stocks across global markets.
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