Correlation Between Panjawattana Plastic and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both Panjawattana Plastic 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 Panjawattana Plastic and Chiangmai Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panjawattana Plastic Public and Chiangmai Frozen Foods, you can compare the effects of market volatilities on Panjawattana Plastic 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 Panjawattana Plastic with a short position of Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panjawattana Plastic and Chiangmai Frozen.
Diversification Opportunities for Panjawattana Plastic and Chiangmai Frozen
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Panjawattana and Chiangmai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Panjawattana Plastic 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 Panjawattana Plastic 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 Panjawattana Plastic 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 Panjawattana Plastic i.e., Panjawattana Plastic and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between Panjawattana Plastic and Chiangmai Frozen
Assuming the 90 days trading horizon Panjawattana Plastic Public is expected to generate 0.59 times more return on investment than Chiangmai Frozen. However, Panjawattana Plastic Public is 1.71 times less risky than Chiangmai Frozen. It trades about -0.3 of its potential returns per unit of risk. Chiangmai Frozen Foods is currently generating about -0.58 per unit of risk. If you would invest 228.00 in Panjawattana Plastic Public on November 7, 2024 and sell it today you would lose (10.00) from holding Panjawattana Plastic Public or give up 4.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panjawattana Plastic Public vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| Panjawattana Plastic |
| Chiangmai Frozen Foods |
Panjawattana Plastic and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panjawattana Plastic and Chiangmai Frozen
The main advantage of trading using opposite Panjawattana Plastic and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panjawattana Plastic 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.| Panjawattana Plastic vs. Kingsmen CMTI Public | Panjawattana Plastic vs. Project Planning Service | Panjawattana Plastic vs. Power Solution Technologies | Panjawattana Plastic vs. Hydrotek Public |
| Chiangmai Frozen vs. Chumporn Palm Oil | Chiangmai Frozen vs. GFPT Public | Chiangmai Frozen vs. Crown Seal Public | Chiangmai Frozen vs. Dynasty Ceramic Public |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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