Correlation Between Hwa Fong and Ratchthani Leasing
Can any of the company-specific risk be diversified away by investing in both Hwa Fong and Ratchthani Leasing 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 Ratchthani Leasing 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 Ratchthani Leasing Public, you can compare the effects of market volatilities on Hwa Fong and Ratchthani Leasing 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 Ratchthani Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwa Fong and Ratchthani Leasing.
Diversification Opportunities for Hwa Fong and Ratchthani Leasing
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hwa and Ratchthani is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hwa Fong Rubber and Ratchthani Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratchthani Leasing Public 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 Ratchthani Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratchthani Leasing Public has no effect on the direction of Hwa Fong i.e., Hwa Fong and Ratchthani Leasing go up and down completely randomly.
Pair Corralation between Hwa Fong and Ratchthani Leasing
Assuming the 90 days trading horizon Hwa Fong Rubber is expected to generate 1.0 times more return on investment than Ratchthani Leasing. However, Hwa Fong Rubber is 1.0 times less risky than Ratchthani Leasing. It trades about 0.06 of its potential returns per unit of risk. Ratchthani Leasing Public is currently generating about 0.06 per unit of risk. If you would invest 411.00 in Hwa Fong Rubber on October 22, 2024 and sell it today you would earn a total of 15.00 from holding Hwa Fong Rubber or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwa Fong Rubber vs. Ratchthani Leasing Public
Performance |
| Timeline |
| Hwa Fong Rubber |
| Ratchthani Leasing Public |
Hwa Fong and Ratchthani Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwa Fong and Ratchthani Leasing
The main advantage of trading using opposite Hwa Fong and Ratchthani Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwa Fong position performs unexpectedly, Ratchthani Leasing 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 Ratchthani Leasing will offset losses from the drop in Ratchthani Leasing's long position.| Hwa Fong vs. Haad Thip Public | Hwa Fong vs. AAPICO Hitech Public | Hwa Fong vs. Inoue Rubber Public | Hwa Fong vs. Hana Microelectronics Public |
| Ratchthani Leasing vs. Thanachart Capital Public | Ratchthani Leasing vs. TISCO Financial Group | Ratchthani Leasing vs. Srisawad Power 1979 | Ratchthani Leasing vs. Home Product Center |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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