Correlation Between East Coast and Cho Thavee
Can any of the company-specific risk be diversified away by investing in both East Coast and Cho Thavee 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 East Coast and Cho Thavee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Coast Furnitech and Cho Thavee Public, you can compare the effects of market volatilities on East Coast and Cho Thavee 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 East Coast with a short position of Cho Thavee. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Coast and Cho Thavee.
Diversification Opportunities for East Coast and Cho Thavee
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between East and Cho is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding East Coast Furnitech and Cho Thavee Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Thavee Public and East Coast 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 East Coast Furnitech are associated (or correlated) with Cho Thavee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Thavee Public has no effect on the direction of East Coast i.e., East Coast and Cho Thavee go up and down completely randomly.
Pair Corralation between East Coast and Cho Thavee
Assuming the 90 days trading horizon East Coast Furnitech is expected to under-perform the Cho Thavee. But the stock apears to be less risky and, when comparing its historical volatility, East Coast Furnitech is 4.7 times less risky than Cho Thavee. The stock trades about -0.32 of its potential returns per unit of risk. The Cho Thavee Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Cho Thavee Public on August 29, 2024 and sell it today you would lose (1.00) from holding Cho Thavee Public or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Coast Furnitech vs. Cho Thavee Public
Performance |
| Timeline |
| East Coast Furnitech |
| Cho Thavee Public |
East Coast and Cho Thavee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Coast and Cho Thavee
The main advantage of trading using opposite East Coast and Cho Thavee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Coast position performs unexpectedly, Cho Thavee 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 Cho Thavee will offset losses from the drop in Cho Thavee's long position.| East Coast vs. G Capital Public | East Coast vs. E for L | East Coast vs. Filter Vision Public | East Coast vs. Chewathai Public |
| Cho Thavee vs. PTT Oil and | Cho Thavee vs. Pico Public | Cho Thavee vs. Pioneer Motor Public | Cho Thavee vs. The Erawan Group |
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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