Correlation Between Chememan Public and Sri Trang
Can any of the company-specific risk be diversified away by investing in both Chememan Public and Sri Trang 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 Chememan Public and Sri Trang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chememan Public and Sri Trang Agro Industry, you can compare the effects of market volatilities on Chememan Public and Sri Trang 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 Chememan Public with a short position of Sri Trang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chememan Public and Sri Trang.
Diversification Opportunities for Chememan Public and Sri Trang
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chememan and Sri is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Chememan Public and Sri Trang Agro Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri Trang Agro and Chememan Public 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 Chememan Public are associated (or correlated) with Sri Trang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri Trang Agro has no effect on the direction of Chememan Public i.e., Chememan Public and Sri Trang go up and down completely randomly.
Pair Corralation between Chememan Public and Sri Trang
Assuming the 90 days trading horizon Chememan Public is expected to generate 6.76 times less return on investment than Sri Trang. But when comparing it to its historical volatility, Chememan Public is 1.78 times less risky than Sri Trang. It trades about 0.02 of its potential returns per unit of risk. Sri Trang Agro Industry is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,259 in Sri Trang Agro Industry on September 12, 2024 and sell it today you would earn a total of 631.00 from holding Sri Trang Agro Industry or generate 50.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chememan Public vs. Sri Trang Agro Industry
Performance |
| Timeline |
| Chememan Public |
| Sri Trang Agro |
Chememan Public and Sri Trang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chememan Public and Sri Trang
The main advantage of trading using opposite Chememan Public and Sri Trang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chememan Public position performs unexpectedly, Sri Trang 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 Sri Trang will offset losses from the drop in Sri Trang's long position.| Chememan Public vs. Sri Trang Agro Industry | Chememan Public vs. Jay Mart Public | Chememan Public vs. Com7 PCL | Chememan Public vs. Energy Absolute 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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