Correlation Between Chiangmai Frozen and Thaifoods Group
Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and Thaifoods Group 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 Thaifoods Group 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 Thaifoods Group Public, you can compare the effects of market volatilities on Chiangmai Frozen and Thaifoods Group 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 Thaifoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and Thaifoods Group.
Diversification Opportunities for Chiangmai Frozen and Thaifoods Group
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chiangmai and Thaifoods is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and Thaifoods Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thaifoods Group 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 Thaifoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thaifoods Group Public has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and Thaifoods Group go up and down completely randomly.
Pair Corralation between Chiangmai Frozen and Thaifoods Group
Assuming the 90 days horizon Chiangmai Frozen Foods is expected to generate 0.25 times more return on investment than Thaifoods Group. However, Chiangmai Frozen Foods is 4.04 times less risky than Thaifoods Group. It trades about -0.58 of its potential returns per unit of risk. Thaifoods Group Public is currently generating about -0.21 per unit of risk. If you would invest 195.00 in Chiangmai Frozen Foods on November 7, 2024 and sell it today you would lose (27.00) from holding Chiangmai Frozen Foods or give up 13.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiangmai Frozen Foods vs. Thaifoods Group Public
Performance |
| Timeline |
| Chiangmai Frozen Foods |
| Thaifoods Group Public |
Chiangmai Frozen and Thaifoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiangmai Frozen and Thaifoods Group
The main advantage of trading using opposite Chiangmai Frozen and Thaifoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiangmai Frozen position performs unexpectedly, Thaifoods Group 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 Thaifoods Group will offset losses from the drop in Thaifoods Group'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 |
| Thaifoods Group vs. Thaifoods Group Public | Thaifoods Group vs. Thai President Foods | Thaifoods Group vs. Thai Capital | Thaifoods Group vs. Thaicom 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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