Correlation Between Chumporn Palm and Fine Metal
Can any of the company-specific risk be diversified away by investing in both Chumporn Palm and Fine Metal 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 Fine Metal 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 Fine Metal Technologies, you can compare the effects of market volatilities on Chumporn Palm and Fine Metal 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 Fine Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chumporn Palm and Fine Metal.
Diversification Opportunities for Chumporn Palm and Fine Metal
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chumporn and Fine is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chumporn Palm Oil and Fine Metal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Metal Technologies 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 Fine Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Metal Technologies has no effect on the direction of Chumporn Palm i.e., Chumporn Palm and Fine Metal go up and down completely randomly.
Pair Corralation between Chumporn Palm and Fine Metal
Assuming the 90 days trading horizon Chumporn Palm Oil is expected to generate 1.0 times more return on investment than Fine Metal. However, Chumporn Palm is 1.0 times more volatile than Fine Metal Technologies. It trades about 0.07 of its potential returns per unit of risk. Fine Metal Technologies is currently generating about 0.07 per unit of risk. If you would invest 257.00 in Chumporn Palm Oil on August 25, 2024 and sell it today you would earn a total of 35.00 from holding Chumporn Palm Oil or generate 13.62% 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. Fine Metal Technologies
Performance |
| Timeline |
| Chumporn Palm Oil |
| Fine Metal Technologies |
Chumporn Palm and Fine Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chumporn Palm and Fine Metal
The main advantage of trading using opposite Chumporn Palm and Fine Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chumporn Palm position performs unexpectedly, Fine Metal 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 Fine Metal will offset losses from the drop in Fine Metal's long position.| Chumporn Palm vs. CP ALL Public | Chumporn Palm vs. Carabao Group Public | Chumporn Palm vs. Thai Union Group | Chumporn Palm vs. Minor International Public |
| Fine Metal vs. GFPT Public | Fine Metal vs. Kulthorn Kirby Public | Fine Metal vs. Chumporn Palm Oil | Fine Metal vs. Haad Thip 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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