Correlation Between Pylon Public and CH Karnchang
Can any of the company-specific risk be diversified away by investing in both Pylon Public and CH Karnchang 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 Pylon Public and CH Karnchang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pylon Public and CH Karnchang Public, you can compare the effects of market volatilities on Pylon Public and CH Karnchang 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 Pylon Public with a short position of CH Karnchang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pylon Public and CH Karnchang.
Diversification Opportunities for Pylon Public and CH Karnchang
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pylon and CH Karnchang is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pylon Public and CH Karnchang Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Karnchang Public and Pylon Public 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 Pylon Public are associated (or correlated) with CH Karnchang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Karnchang Public has no effect on the direction of Pylon Public i.e., Pylon Public and CH Karnchang go up and down completely randomly.
Pair Corralation between Pylon Public and CH Karnchang
Assuming the 90 days trading horizon Pylon Public is expected to under-perform the CH Karnchang. But the stock apears to be less risky and, when comparing its historical volatility, Pylon Public is 1.05 times less risky than CH Karnchang. The stock trades about -0.41 of its potential returns per unit of risk. The CH Karnchang Public is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,870 in CH Karnchang Public on August 29, 2024 and sell it today you would lose (80.00) from holding CH Karnchang Public or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pylon Public vs. CH Karnchang Public
Performance |
| Timeline |
| Pylon Public |
| CH Karnchang Public |
Pylon Public and CH Karnchang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pylon Public and CH Karnchang
The main advantage of trading using opposite Pylon Public and CH Karnchang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pylon Public position performs unexpectedly, CH Karnchang 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 CH Karnchang will offset losses from the drop in CH Karnchang's long position.| Pylon Public vs. Seafco Public | Pylon Public vs. PTG Energy PCL | Pylon Public vs. CH Karnchang Public | Pylon Public vs. Ratchthani Leasing Public |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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