Correlation Between Chiangmai Frozen and Krung Thai
Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and Krung Thai 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 Krung Thai 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 Krung Thai Bank, you can compare the effects of market volatilities on Chiangmai Frozen and Krung Thai 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 Krung Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and Krung Thai.
Diversification Opportunities for Chiangmai Frozen and Krung Thai
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chiangmai and Krung is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and Krung Thai Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krung Thai Bank 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 Krung Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krung Thai Bank has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and Krung Thai go up and down completely randomly.
Pair Corralation between Chiangmai Frozen and Krung Thai
Assuming the 90 days horizon Chiangmai Frozen Foods is expected to under-perform the Krung Thai. But the stock apears to be less risky and, when comparing its historical volatility, Chiangmai Frozen Foods is 1.39 times less risky than Krung Thai. The stock trades about -0.58 of its potential returns per unit of risk. The Krung Thai Bank is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,160 in Krung Thai Bank on November 7, 2024 and sell it today you would earn a total of 180.00 from holding Krung Thai Bank or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiangmai Frozen Foods vs. Krung Thai Bank
Performance |
| Timeline |
| Chiangmai Frozen Foods |
| Krung Thai Bank |
Chiangmai Frozen and Krung Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiangmai Frozen and Krung Thai
The main advantage of trading using opposite Chiangmai Frozen and Krung Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiangmai Frozen position performs unexpectedly, Krung Thai 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 Krung Thai will offset losses from the drop in Krung Thai'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 |
| Krung Thai vs. The Siam Commercial | Krung Thai vs. Thai Union Group | Krung Thai vs. Kasikornbank Public | Krung Thai vs. The Siam Cement |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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