Correlation Between Erawan and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both Erawan and Chiangmai Frozen 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 Erawan and Chiangmai Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Erawan Group and Chiangmai Frozen Foods, you can compare the effects of market volatilities on Erawan and Chiangmai Frozen 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 Erawan with a short position of Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erawan and Chiangmai Frozen.
Diversification Opportunities for Erawan and Chiangmai Frozen
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Erawan and Chiangmai is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding The Erawan Group and Chiangmai Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiangmai Frozen Foods and Erawan 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 The Erawan Group are associated (or correlated) with Chiangmai Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiangmai Frozen Foods has no effect on the direction of Erawan i.e., Erawan and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between Erawan and Chiangmai Frozen
Assuming the 90 days trading horizon The Erawan Group is expected to under-perform the Chiangmai Frozen. In addition to that, Erawan is 1.39 times more volatile than Chiangmai Frozen Foods. It trades about -0.41 of its total potential returns per unit of risk. Chiangmai Frozen Foods is currently generating about -0.11 per unit of volatility. If you would invest 208.00 in Chiangmai Frozen Foods on September 20, 2024 and sell it today you would lose (6.00) from holding Chiangmai Frozen Foods or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Erawan Group vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| Erawan Group |
| Chiangmai Frozen Foods |
Erawan and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erawan and Chiangmai Frozen
The main advantage of trading using opposite Erawan and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erawan position performs unexpectedly, Chiangmai Frozen 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 Chiangmai Frozen will offset losses from the drop in Chiangmai Frozen's long position.| Erawan vs. Central Plaza Hotel | Erawan vs. Minor International Public | Erawan vs. Central Pattana Public | Erawan vs. CP ALL Public |
| Chiangmai Frozen vs. GFPT Public | Chiangmai Frozen vs. Dynasty Ceramic Public | Chiangmai Frozen vs. Haad Thip Public | Chiangmai Frozen 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |