Correlation Between Phatra Leasing and Charan Insurance
Can any of the company-specific risk be diversified away by investing in both Phatra Leasing and Charan Insurance 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 Phatra Leasing and Charan Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phatra Leasing Public and Charan Insurance Public, you can compare the effects of market volatilities on Phatra Leasing and Charan Insurance 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 Phatra Leasing with a short position of Charan Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phatra Leasing and Charan Insurance.
Diversification Opportunities for Phatra Leasing and Charan Insurance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Phatra and Charan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Phatra Leasing Public and Charan Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charan Insurance Public and Phatra Leasing 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 Phatra Leasing Public are associated (or correlated) with Charan Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charan Insurance Public has no effect on the direction of Phatra Leasing i.e., Phatra Leasing and Charan Insurance go up and down completely randomly.
Pair Corralation between Phatra Leasing and Charan Insurance
Assuming the 90 days horizon Phatra Leasing Public is expected to under-perform the Charan Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Phatra Leasing Public is 2.38 times less risky than Charan Insurance. The stock trades about -0.19 of its potential returns per unit of risk. The Charan Insurance Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,060 in Charan Insurance Public on November 3, 2024 and sell it today you would lose (60.00) from holding Charan Insurance Public or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phatra Leasing Public vs. Charan Insurance Public
Performance |
| Timeline |
| Phatra Leasing Public |
| Charan Insurance Public |
Phatra Leasing and Charan Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phatra Leasing and Charan Insurance
The main advantage of trading using opposite Phatra Leasing and Charan Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phatra Leasing position performs unexpectedly, Charan Insurance 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 Charan Insurance will offset losses from the drop in Charan Insurance's long position.| Phatra Leasing vs. KGI Securities Public | Phatra Leasing vs. Pacific Pipe Public | Phatra Leasing vs. Peoples Garment Public | Phatra Leasing vs. Power Line Engineering |
| Charan Insurance vs. Thai President Foods | Charan Insurance vs. Chow Steel Industries | Charan Insurance vs. Syntec Construction Public | Charan Insurance vs. Sahamit Machinery 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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