Correlation Between Chiangmai Frozen and Phatra Leasing
Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and Phatra 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 Chiangmai Frozen and Phatra Leasing 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 Phatra Leasing Public, you can compare the effects of market volatilities on Chiangmai Frozen and Phatra 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 Chiangmai Frozen with a short position of Phatra Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and Phatra Leasing.
Diversification Opportunities for Chiangmai Frozen and Phatra Leasing
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chiangmai and Phatra is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and Phatra Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phatra Leasing 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 Phatra Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phatra Leasing Public has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and Phatra Leasing go up and down completely randomly.
Pair Corralation between Chiangmai Frozen and Phatra Leasing
Assuming the 90 days horizon Chiangmai Frozen Foods is expected to generate 0.99 times more return on investment than Phatra Leasing. However, Chiangmai Frozen Foods is 1.01 times less risky than Phatra Leasing. It trades about 0.04 of its potential returns per unit of risk. Phatra Leasing Public is currently generating about 0.04 per unit of risk. If you would invest 264.00 in Chiangmai Frozen Foods on October 9, 2024 and sell it today you would lose (69.00) from holding Chiangmai Frozen Foods or give up 26.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.96% |
| Values | Daily Returns |
Chiangmai Frozen Foods vs. Phatra Leasing Public
Performance |
| Timeline |
| Chiangmai Frozen Foods |
| Phatra Leasing Public |
Chiangmai Frozen and Phatra Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiangmai Frozen and Phatra Leasing
The main advantage of trading using opposite Chiangmai Frozen and Phatra Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiangmai Frozen position performs unexpectedly, Phatra 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 Phatra Leasing will offset losses from the drop in Phatra Leasing'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 |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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