Correlation Between Chukai Public and Hwa Fong
Can any of the company-specific risk be diversified away by investing in both Chukai Public and Hwa Fong 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 Chukai Public and Hwa Fong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chukai Public and Hwa Fong Rubber, you can compare the effects of market volatilities on Chukai Public and Hwa Fong 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 Chukai Public with a short position of Hwa Fong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chukai Public and Hwa Fong.
Diversification Opportunities for Chukai Public and Hwa Fong
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chukai and Hwa is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Chukai Public and Hwa Fong Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwa Fong Rubber and Chukai 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 Chukai Public are associated (or correlated) with Hwa Fong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwa Fong Rubber has no effect on the direction of Chukai Public i.e., Chukai Public and Hwa Fong go up and down completely randomly.
Pair Corralation between Chukai Public and Hwa Fong
Assuming the 90 days trading horizon Chukai Public is expected to under-perform the Hwa Fong. In addition to that, Chukai Public is 1.24 times more volatile than Hwa Fong Rubber. It trades about -0.28 of its total potential returns per unit of risk. Hwa Fong Rubber is currently generating about -0.27 per unit of volatility. If you would invest 456.00 in Hwa Fong Rubber on August 28, 2024 and sell it today you would lose (32.00) from holding Hwa Fong Rubber or give up 7.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chukai Public vs. Hwa Fong Rubber
Performance |
| Timeline |
| Chukai Public |
| Hwa Fong Rubber |
Chukai Public and Hwa Fong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chukai Public and Hwa Fong
The main advantage of trading using opposite Chukai Public and Hwa Fong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chukai Public position performs unexpectedly, Hwa Fong 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 Hwa Fong will offset losses from the drop in Hwa Fong's long position.| Chukai Public vs. Tata Steel Public | Chukai Public vs. Thaifoods Group Public | Chukai Public vs. TMT Steel Public | Chukai Public vs. The Erawan Group |
| Hwa Fong vs. SCB X Public | Hwa Fong vs. Kasikornbank Public | Hwa Fong vs. PTT Public | Hwa Fong vs. Kasikornbank 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |