Correlation Between Stock Exchange and Chin Huay
Can any of the company-specific risk be diversified away by investing in both Stock Exchange and Chin Huay 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 Stock Exchange and Chin Huay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stock Exchange Of and Chin Huay PCL, you can compare the effects of market volatilities on Stock Exchange and Chin Huay 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 Stock Exchange with a short position of Chin Huay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stock Exchange and Chin Huay.
Diversification Opportunities for Stock Exchange and Chin Huay
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stock and Chin is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stock Exchange Of and Chin Huay PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Huay PCL and Stock Exchange 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 Stock Exchange Of are associated (or correlated) with Chin Huay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Huay PCL has no effect on the direction of Stock Exchange i.e., Stock Exchange and Chin Huay go up and down completely randomly.
Pair Corralation between Stock Exchange and Chin Huay
Assuming the 90 days trading horizon Stock Exchange Of is expected to generate 0.42 times more return on investment than Chin Huay. However, Stock Exchange Of is 2.4 times less risky than Chin Huay. It trades about -0.01 of its potential returns per unit of risk. Chin Huay PCL is currently generating about -0.17 per unit of risk. If you would invest 144,507 in Stock Exchange Of on September 13, 2024 and sell it today you would lose (202.00) from holding Stock Exchange Of or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stock Exchange Of vs. Chin Huay PCL
Performance |
| Timeline |
Stock Exchange and Chin Huay Volatility Contrast
Predicted Return Density |
| Returns |
Stock Exchange Of
Pair trading matchups for Stock Exchange
Chin Huay PCL
Pair trading matchups for Chin Huay
Pair Trading with Stock Exchange and Chin Huay
The main advantage of trading using opposite Stock Exchange and Chin Huay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stock Exchange position performs unexpectedly, Chin Huay 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 Chin Huay will offset losses from the drop in Chin Huay's long position.| Stock Exchange vs. Information and Communication | Stock Exchange vs. Workpoint Entertainment Public | Stock Exchange vs. SAF Special Steel | Stock Exchange vs. The Steel Public |
| Chin Huay vs. Chamni Eye PCL | Chin Huay vs. Bless Asset Group | Chin Huay vs. Bioscience Animal Health | Chin Huay vs. Royal Plus 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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