Correlation Between Tropical Canning and Chularat Hospital
Can any of the company-specific risk be diversified away by investing in both Tropical Canning and Chularat Hospital 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 Tropical Canning and Chularat Hospital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tropical Canning Public and Chularat Hospital Public, you can compare the effects of market volatilities on Tropical Canning and Chularat Hospital 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 Tropical Canning with a short position of Chularat Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tropical Canning and Chularat Hospital.
Diversification Opportunities for Tropical Canning and Chularat Hospital
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tropical and Chularat is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tropical Canning Public and Chularat Hospital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chularat Hospital Public and Tropical Canning 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 Tropical Canning Public are associated (or correlated) with Chularat Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chularat Hospital Public has no effect on the direction of Tropical Canning i.e., Tropical Canning and Chularat Hospital go up and down completely randomly.
Pair Corralation between Tropical Canning and Chularat Hospital
Assuming the 90 days horizon Tropical Canning is expected to generate 2.04 times less return on investment than Chularat Hospital. But when comparing it to its historical volatility, Tropical Canning Public is 1.41 times less risky than Chularat Hospital. It trades about 0.04 of its potential returns per unit of risk. Chularat Hospital Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 367.00 in Chularat Hospital Public on August 26, 2024 and sell it today you would lose (107.00) from holding Chularat Hospital Public or give up 29.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tropical Canning Public vs. Chularat Hospital Public
Performance |
| Timeline |
| Tropical Canning Public |
| Chularat Hospital Public |
Tropical Canning and Chularat Hospital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tropical Canning and Chularat Hospital
The main advantage of trading using opposite Tropical Canning and Chularat Hospital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tropical Canning position performs unexpectedly, Chularat Hospital 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 Chularat Hospital will offset losses from the drop in Chularat Hospital's long position.| Tropical Canning vs. CP ALL Public | Tropical Canning vs. Thai Union Group | Tropical Canning vs. Minor International Public | Tropical Canning vs. Central Pattana 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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