Correlation Between Chiangmai Frozen and Eastern Polymer
Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and Eastern Polymer 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 Eastern Polymer 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 Eastern Polymer Group, you can compare the effects of market volatilities on Chiangmai Frozen and Eastern Polymer 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 Eastern Polymer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and Eastern Polymer.
Diversification Opportunities for Chiangmai Frozen and Eastern Polymer
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chiangmai and Eastern is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and Eastern Polymer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Polymer Group 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 Eastern Polymer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Polymer Group has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and Eastern Polymer go up and down completely randomly.
Pair Corralation between Chiangmai Frozen and Eastern Polymer
Assuming the 90 days horizon Chiangmai Frozen Foods is expected to generate 20.37 times more return on investment than Eastern Polymer. However, Chiangmai Frozen is 20.37 times more volatile than Eastern Polymer Group. It trades about 0.04 of its potential returns per unit of risk. Eastern Polymer Group is currently generating about -0.07 per unit of risk. If you would invest 264.00 in Chiangmai Frozen Foods on November 2, 2024 and sell it today you would lose (91.00) from holding Chiangmai Frozen Foods or give up 34.47% 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. Eastern Polymer Group
Performance |
| Timeline |
| Chiangmai Frozen Foods |
| Eastern Polymer Group |
Chiangmai Frozen and Eastern Polymer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiangmai Frozen and Eastern Polymer
The main advantage of trading using opposite Chiangmai Frozen and Eastern Polymer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiangmai Frozen position performs unexpectedly, Eastern Polymer 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 Eastern Polymer will offset losses from the drop in Eastern Polymer'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 |
| Eastern Polymer vs. AP Public | Eastern Polymer vs. CK Power Public | Eastern Polymer vs. Gunkul Engineering Public | Eastern Polymer vs. Indorama Ventures PCL |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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