Correlation Between Gunkul Engineering and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both Gunkul Engineering 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 Gunkul Engineering and Chiangmai Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gunkul Engineering Public and Chiangmai Frozen Foods, you can compare the effects of market volatilities on Gunkul Engineering 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 Gunkul Engineering with a short position of Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunkul Engineering and Chiangmai Frozen.
Diversification Opportunities for Gunkul Engineering and Chiangmai Frozen
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gunkul and Chiangmai is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gunkul Engineering Public 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 Gunkul Engineering 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 Gunkul Engineering Public 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 Gunkul Engineering i.e., Gunkul Engineering and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between Gunkul Engineering and Chiangmai Frozen
Assuming the 90 days trading horizon Gunkul Engineering is expected to generate 354.11 times less return on investment than Chiangmai Frozen. But when comparing it to its historical volatility, Gunkul Engineering Public is 54.82 times less risky than Chiangmai Frozen. It trades about 0.02 of its potential returns per unit of risk. Chiangmai Frozen Foods is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Chiangmai Frozen Foods on September 2, 2024 and sell it today you would lose (28.00) from holding Chiangmai Frozen Foods or give up 12.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gunkul Engineering Public vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| Gunkul Engineering Public |
| Chiangmai Frozen Foods |
Gunkul Engineering and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunkul Engineering and Chiangmai Frozen
The main advantage of trading using opposite Gunkul Engineering and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunkul Engineering 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.| Gunkul Engineering vs. Gulf Energy Development | Gunkul Engineering vs. Energy Absolute Public | Gunkul Engineering vs. WHA Public | Gunkul Engineering vs. Bangkok Expressway and |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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