Correlation Between Hwa Fong and Com7 PCL
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and Com7 PCL 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 Hwa Fong and Com7 PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwa Fong Rubber and Com7 PCL, you can compare the effects of market volatilities on Hwa Fong and Com7 PCL 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 Hwa Fong with a short position of Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Com7 PCL.
Diversification Opportunities for Hwa Fong and Com7 PCL
Pay attention - limited upside
The 3 months correlation between Hwa and Com7 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL and Hwa Fong 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 Hwa Fong Rubber are associated (or correlated) with Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of Hwa Fong i.e., Hwa Fong and Com7 PCL go up and down completely randomly.
Pair Corralation between Hwa Fong and Com7 PCL
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 19.75 times more return on investment than Com7 PCL. However, Hwa Fong is 19.75 times more volatile than Com7 PCL. It trades about 0.04 of its potential returns per unit of risk. Com7 PCL is currently generating about 0.0 per unit of risk. If you would invest 549.00 in Hwa Fong Rubber on September 13, 2024 and sell it today you would lose (135.00) from holding Hwa Fong Rubber or give up 24.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. Com7 PCL
Performance |
| Timeline |
| Hwa Fong Rubber |
| Com7 PCL |
Hwa Fong and Com7 PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and Com7 PCL
The main advantage of trading using opposite Hwa Fong and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, Com7 PCL 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 Com7 PCL will offset losses from the drop in Com7 PCL's long position.| Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Haad Thip Public | Hwa Fong vs. Italian Thai Development Public |
| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |