Correlation Between Royal Plus and Chamni Eye
Can any of the company-specific risk be diversified away by investing in both Royal Plus and Chamni Eye 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 Royal Plus and Chamni Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Plus PCL and Chamni Eye PCL, you can compare the effects of market volatilities on Royal Plus and Chamni Eye 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 Royal Plus with a short position of Chamni Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Plus and Chamni Eye.
Diversification Opportunities for Royal Plus and Chamni Eye
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Royal and Chamni is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Royal Plus PCL and Chamni Eye PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chamni Eye PCL and Royal Plus 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 Royal Plus PCL are associated (or correlated) with Chamni Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chamni Eye PCL has no effect on the direction of Royal Plus i.e., Royal Plus and Chamni Eye go up and down completely randomly.
Pair Corralation between Royal Plus and Chamni Eye
Assuming the 90 days trading horizon Royal Plus PCL is expected to generate 1.19 times more return on investment than Chamni Eye. However, Royal Plus is 1.19 times more volatile than Chamni Eye PCL. It trades about -0.14 of its potential returns per unit of risk. Chamni Eye PCL is currently generating about -0.29 per unit of risk. If you would invest 530.00 in Royal Plus PCL on September 12, 2024 and sell it today you would lose (25.00) from holding Royal Plus PCL or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Plus PCL vs. Chamni Eye PCL
Performance |
| Timeline |
| Royal Plus PCL |
| Chamni Eye PCL |
Royal Plus and Chamni Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Plus and Chamni Eye
The main advantage of trading using opposite Royal Plus and Chamni Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Plus position performs unexpectedly, Chamni Eye 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 Chamni Eye will offset losses from the drop in Chamni Eye's long position.| Royal Plus vs. Delta Electronics Public | Royal Plus vs. Delta Electronics Public | Royal Plus vs. Airports of Thailand | Royal Plus vs. Airports of Thailand |
| Chamni Eye vs. Bioscience Animal Health | Chamni Eye vs. Bless Asset Group | Chamni Eye vs. CAZ Public | Chamni Eye vs. Bluebik Group PCL |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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