Correlation Between Globlex Holding and Chai Watana
Can any of the company-specific risk be diversified away by investing in both Globlex Holding and Chai Watana 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 Globlex Holding and Chai Watana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globlex Holding Management and Chai Watana Tannery, you can compare the effects of market volatilities on Globlex Holding and Chai Watana 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 Globlex Holding with a short position of Chai Watana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globlex Holding and Chai Watana.
Diversification Opportunities for Globlex Holding and Chai Watana
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globlex and Chai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Globlex Holding Management and Chai Watana Tannery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chai Watana Tannery and Globlex Holding 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 Globlex Holding Management are associated (or correlated) with Chai Watana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chai Watana Tannery has no effect on the direction of Globlex Holding i.e., Globlex Holding and Chai Watana go up and down completely randomly.
Pair Corralation between Globlex Holding and Chai Watana
Assuming the 90 days trading horizon Globlex Holding Management is expected to generate 0.45 times more return on investment than Chai Watana. However, Globlex Holding Management is 2.21 times less risky than Chai Watana. It trades about -0.05 of its potential returns per unit of risk. Chai Watana Tannery is currently generating about -0.42 per unit of risk. If you would invest 66.00 in Globlex Holding Management on October 24, 2024 and sell it today you would lose (1.00) from holding Globlex Holding Management or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Globlex Holding Management vs. Chai Watana Tannery
Performance |
| Timeline |
| Globlex Holding Mana |
| Chai Watana Tannery |
Globlex Holding and Chai Watana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globlex Holding and Chai Watana
The main advantage of trading using opposite Globlex Holding and Chai Watana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globlex Holding position performs unexpectedly, Chai Watana 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 Chai Watana will offset losses from the drop in Chai Watana's long position.| Globlex Holding vs. Asia Plus Group | Globlex Holding vs. Eastern Commercial Leasing | Globlex Holding vs. Country Group Holdings | Globlex Holding vs. EMC 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 CEOs Directory module to screen CEOs from public companies around the world.
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