Correlation Between Chumporn Palm and Airports
Can any of the company-specific risk be diversified away by investing in both Chumporn Palm and Airports 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 Airports 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 Airports of Thailand, you can compare the effects of market volatilities on Chumporn Palm and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chumporn Palm and Airports.
Diversification Opportunities for Chumporn Palm and Airports
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chumporn and Airports is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chumporn Palm Oil and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Chumporn Palm i.e., Chumporn Palm and Airports go up and down completely randomly.
Pair Corralation between Chumporn Palm and Airports
Assuming the 90 days trading horizon Chumporn Palm Oil is expected to generate 40.08 times more return on investment than Airports. However, Chumporn Palm is 40.08 times more volatile than Airports of Thailand. It trades about 0.04 of its potential returns per unit of risk. Airports of Thailand is currently generating about -0.03 per unit of risk. If you would invest 267.00 in Chumporn Palm Oil on September 4, 2024 and sell it today you would earn a total of 17.00 from holding Chumporn Palm Oil or generate 6.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chumporn Palm Oil vs. Airports of Thailand
Performance |
| Timeline |
| Chumporn Palm Oil |
| Airports of Thailand |
Chumporn Palm and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chumporn Palm and Airports
The main advantage of trading using opposite Chumporn Palm and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chumporn Palm position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Chumporn Palm vs. Univanich Palm Oil | Chumporn Palm vs. Chiangmai Frozen Foods | Chumporn Palm vs. Dynasty Ceramic Public | Chumporn Palm vs. GFPT Public |
| Airports vs. CP ALL Public | Airports vs. PTT Public | Airports vs. Kasikornbank Public | Airports vs. Bangkok Dusit Medical |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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