Correlation Between Christiani Nielsen and CH Karnchang
Can any of the company-specific risk be diversified away by investing in both Christiani Nielsen and CH Karnchang 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 Christiani Nielsen and CH Karnchang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Christiani Nielsen Public and CH Karnchang Public, you can compare the effects of market volatilities on Christiani Nielsen and CH Karnchang 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 Christiani Nielsen with a short position of CH Karnchang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christiani Nielsen and CH Karnchang.
Diversification Opportunities for Christiani Nielsen and CH Karnchang
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Christiani and CH Karnchang is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Christiani Nielsen Public and CH Karnchang Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Karnchang Public and Christiani Nielsen 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 Christiani Nielsen Public are associated (or correlated) with CH Karnchang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Karnchang Public has no effect on the direction of Christiani Nielsen i.e., Christiani Nielsen and CH Karnchang go up and down completely randomly.
Pair Corralation between Christiani Nielsen and CH Karnchang
Assuming the 90 days trading horizon Christiani Nielsen Public is expected to under-perform the CH Karnchang. In addition to that, Christiani Nielsen is 1.16 times more volatile than CH Karnchang Public. It trades about -0.34 of its total potential returns per unit of risk. CH Karnchang Public is currently generating about -0.25 per unit of volatility. If you would invest 1,870 in CH Karnchang Public on October 25, 2024 and sell it today you would lose (190.00) from holding CH Karnchang Public or give up 10.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Christiani Nielsen Public vs. CH Karnchang Public
Performance |
| Timeline |
| Christiani Nielsen Public |
| CH Karnchang Public |
Christiani Nielsen and CH Karnchang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christiani Nielsen and CH Karnchang
The main advantage of trading using opposite Christiani Nielsen and CH Karnchang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christiani Nielsen position performs unexpectedly, CH Karnchang 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 CH Karnchang will offset losses from the drop in CH Karnchang's long position.| Christiani Nielsen vs. CH Karnchang Public | Christiani Nielsen vs. Italian Thai Development Public | Christiani Nielsen vs. EMC Public | Christiani Nielsen vs. AAPICO Hitech 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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