Correlation Between Chiangmai Frozen and VGI Public
Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and VGI Public 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 VGI Public 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 VGI Public, you can compare the effects of market volatilities on Chiangmai Frozen and VGI Public 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 VGI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and VGI Public.
Diversification Opportunities for Chiangmai Frozen and VGI Public
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chiangmai and VGI is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and VGI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGI 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 VGI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGI Public has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and VGI Public go up and down completely randomly.
Pair Corralation between Chiangmai Frozen and VGI Public
Assuming the 90 days horizon Chiangmai Frozen is expected to generate 1.08 times less return on investment than VGI Public. But when comparing it to its historical volatility, Chiangmai Frozen Foods is 1.0 times less risky than VGI Public. It trades about 0.08 of its potential returns per unit of risk. VGI Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 158.00 in VGI Public on August 28, 2024 and sell it today you would earn a total of 102.00 from holding VGI Public or generate 64.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiangmai Frozen Foods vs. VGI Public
Performance |
| Timeline |
| Chiangmai Frozen Foods |
| VGI Public |
Chiangmai Frozen and VGI Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiangmai Frozen and VGI Public
The main advantage of trading using opposite Chiangmai Frozen and VGI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiangmai Frozen position performs unexpectedly, VGI Public 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 VGI Public will offset losses from the drop in VGI Public's long position.The idea behind Chiangmai Frozen Foods and VGI Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| VGI Public vs. Indara Insurance Public | VGI Public vs. Regional Container Lines | VGI Public vs. Regional Container Lines | VGI Public vs. Mahachai Hospital 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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