Correlation Between Chumporn Palm and Asia Fiber
Can any of the company-specific risk be diversified away by investing in both Chumporn Palm and Asia Fiber 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 Chumporn Palm and Asia Fiber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chumporn Palm Oil and Asia Fiber Public, you can compare the effects of market volatilities on Chumporn Palm and Asia Fiber 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 Chumporn Palm with a short position of Asia Fiber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chumporn Palm and Asia Fiber.
Diversification Opportunities for Chumporn Palm and Asia Fiber
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chumporn and Asia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chumporn Palm Oil and Asia Fiber Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Fiber Public and Chumporn Palm 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 Chumporn Palm Oil are associated (or correlated) with Asia Fiber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Fiber Public has no effect on the direction of Chumporn Palm i.e., Chumporn Palm and Asia Fiber go up and down completely randomly.
Pair Corralation between Chumporn Palm and Asia Fiber
Assuming the 90 days trading horizon Chumporn Palm Oil is expected to under-perform the Asia Fiber. In addition to that, Chumporn Palm is 1.65 times more volatile than Asia Fiber Public. It trades about -0.21 of its total potential returns per unit of risk. Asia Fiber Public is currently generating about -0.22 per unit of volatility. If you would invest 515.00 in Asia Fiber Public on September 1, 2024 and sell it today you would lose (35.00) from holding Asia Fiber Public or give up 6.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chumporn Palm Oil vs. Asia Fiber Public
Performance |
| Timeline |
| Chumporn Palm Oil |
| Asia Fiber Public |
Chumporn Palm and Asia Fiber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chumporn Palm and Asia Fiber
The main advantage of trading using opposite Chumporn Palm and Asia Fiber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chumporn Palm position performs unexpectedly, Asia Fiber 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 Asia Fiber will offset losses from the drop in Asia Fiber's long position.| Chumporn Palm vs. MK Restaurant Group | Chumporn Palm vs. TRC Construction Public | Chumporn Palm vs. Bangkok Expressway and | Chumporn Palm vs. Lohakit Metal Public |
| Asia Fiber vs. AJ Plast Public | Asia Fiber vs. Aikchol Hospital Public | Asia Fiber vs. Boutique Newcity Public | Asia Fiber vs. Allianz Ayudhya Capital |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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