Correlation Between Chukai Public and Permsin Steel
Can any of the company-specific risk be diversified away by investing in both Chukai Public and Permsin Steel 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 Permsin Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chukai Public and Permsin Steel Works, you can compare the effects of market volatilities on Chukai Public and Permsin Steel 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 Permsin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chukai Public and Permsin Steel.
Diversification Opportunities for Chukai Public and Permsin Steel
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chukai and Permsin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Chukai Public and Permsin Steel Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permsin Steel Works 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 Permsin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permsin Steel Works has no effect on the direction of Chukai Public i.e., Chukai Public and Permsin Steel go up and down completely randomly.
Pair Corralation between Chukai Public and Permsin Steel
Assuming the 90 days trading horizon Chukai Public is expected to generate 1.01 times less return on investment than Permsin Steel. In addition to that, Chukai Public is 1.0 times more volatile than Permsin Steel Works. It trades about 0.08 of its total potential returns per unit of risk. Permsin Steel Works is currently generating about 0.08 per unit of volatility. If you would invest 87.00 in Permsin Steel Works on September 3, 2024 and sell it today you would lose (22.00) from holding Permsin Steel Works or give up 25.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chukai Public vs. Permsin Steel Works
Performance |
| Timeline |
| Chukai Public |
| Permsin Steel Works |
Chukai Public and Permsin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chukai Public and Permsin Steel
The main advantage of trading using opposite Chukai Public and Permsin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chukai Public position performs unexpectedly, Permsin Steel 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 Permsin Steel will offset losses from the drop in Permsin Steel's long position.| Chukai Public vs. Asia Aviation Public | Chukai Public vs. Bangkok Dusit Medical | Chukai Public vs. Bangkok Expressway and | Chukai Public vs. Airports of Thailand |
| Permsin Steel vs. PTT Public | Permsin Steel vs. PTT Exploration and | Permsin Steel vs. The Siam Cement | Permsin Steel vs. CP ALL 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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