Correlation Between Team Precision and Chayo Group
Can any of the company-specific risk be diversified away by investing in both Team Precision and Chayo Group 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 Team Precision and Chayo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Team Precision Public and Chayo Group Public, you can compare the effects of market volatilities on Team Precision and Chayo Group 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 Team Precision with a short position of Chayo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Team Precision and Chayo Group.
Diversification Opportunities for Team Precision and Chayo Group
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Team and Chayo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Team Precision Public and Chayo Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chayo Group Public and Team Precision 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 Team Precision Public are associated (or correlated) with Chayo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chayo Group Public has no effect on the direction of Team Precision i.e., Team Precision and Chayo Group go up and down completely randomly.
Pair Corralation between Team Precision and Chayo Group
Assuming the 90 days trading horizon Team Precision Public is expected to generate 15.59 times more return on investment than Chayo Group. However, Team Precision is 15.59 times more volatile than Chayo Group Public. It trades about 0.04 of its potential returns per unit of risk. Chayo Group Public is currently generating about -0.05 per unit of risk. If you would invest 827.00 in Team Precision Public on September 3, 2024 and sell it today you would lose (553.00) from holding Team Precision Public or give up 66.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Team Precision Public vs. Chayo Group Public
Performance |
| Timeline |
| Team Precision Public |
| Chayo Group Public |
Team Precision and Chayo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Team Precision and Chayo Group
The main advantage of trading using opposite Team Precision and Chayo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Team Precision position performs unexpectedly, Chayo Group 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 Chayo Group will offset losses from the drop in Chayo Group's long position.| Team Precision vs. SVI Public | Team Precision vs. SVOA Public | Team Precision vs. Hana Microelectronics Public | Team Precision vs. TKS Technologies Public |
| Chayo Group vs. JMT Network Services | Chayo Group vs. Srisawad Power 1979 | Chayo Group vs. Carabao Group Public | Chayo Group vs. Muangthai Capital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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