Correlation Between Chai Watana and Sanko Diecasting
Can any of the company-specific risk be diversified away by investing in both Chai Watana and Sanko Diecasting 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 Chai Watana and Sanko Diecasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chai Watana Tannery and Sanko Diecasting Public, you can compare the effects of market volatilities on Chai Watana and Sanko Diecasting 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 Chai Watana with a short position of Sanko Diecasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chai Watana and Sanko Diecasting.
Diversification Opportunities for Chai Watana and Sanko Diecasting
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chai and Sanko is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chai Watana Tannery and Sanko Diecasting Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanko Diecasting Public and Chai Watana 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 Chai Watana Tannery are associated (or correlated) with Sanko Diecasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanko Diecasting Public has no effect on the direction of Chai Watana i.e., Chai Watana and Sanko Diecasting go up and down completely randomly.
Pair Corralation between Chai Watana and Sanko Diecasting
Assuming the 90 days trading horizon Chai Watana Tannery is expected to under-perform the Sanko Diecasting. In addition to that, Chai Watana is 2.32 times more volatile than Sanko Diecasting Public. It trades about -0.36 of its total potential returns per unit of risk. Sanko Diecasting Public is currently generating about -0.17 per unit of volatility. If you would invest 124.00 in Sanko Diecasting Public on October 26, 2024 and sell it today you would lose (9.00) from holding Sanko Diecasting Public or give up 7.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Chai Watana Tannery vs. Sanko Diecasting Public
Performance |
| Timeline |
| Chai Watana Tannery |
| Sanko Diecasting Public |
Chai Watana and Sanko Diecasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chai Watana and Sanko Diecasting
The main advantage of trading using opposite Chai Watana and Sanko Diecasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chai Watana position performs unexpectedly, Sanko Diecasting 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 Sanko Diecasting will offset losses from the drop in Sanko Diecasting's long position.| Chai Watana vs. Chumporn Palm Oil | Chai Watana vs. Eastern Commercial Leasing | Chai Watana vs. Cal Comp Electronics Public | Chai Watana vs. AAPICO Hitech Public |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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