Correlation Between Thaifoods Group and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both Thaifoods Group and Chiangmai Frozen 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 Thaifoods Group and Chiangmai Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thaifoods Group Public and Chiangmai Frozen Foods, you can compare the effects of market volatilities on Thaifoods Group and Chiangmai Frozen 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 Thaifoods Group with a short position of Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thaifoods Group and Chiangmai Frozen.
Diversification Opportunities for Thaifoods Group and Chiangmai Frozen
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Thaifoods and Chiangmai is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Thaifoods Group Public and Chiangmai Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiangmai Frozen Foods and Thaifoods Group 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 Thaifoods Group Public are associated (or correlated) with Chiangmai Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiangmai Frozen Foods has no effect on the direction of Thaifoods Group i.e., Thaifoods Group and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between Thaifoods Group and Chiangmai Frozen
Assuming the 90 days trading horizon Thaifoods Group Public is expected to under-perform the Chiangmai Frozen. In addition to that, Thaifoods Group is 4.04 times more volatile than Chiangmai Frozen Foods. It trades about -0.21 of its total potential returns per unit of risk. Chiangmai Frozen Foods is currently generating about -0.58 per unit of volatility. If you would invest 195.00 in Chiangmai Frozen Foods on November 7, 2024 and sell it today you would lose (27.00) from holding Chiangmai Frozen Foods or give up 13.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thaifoods Group Public vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| Thaifoods Group Public |
| Chiangmai Frozen Foods |
Thaifoods Group and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thaifoods Group and Chiangmai Frozen
The main advantage of trading using opposite Thaifoods Group and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thaifoods Group position performs unexpectedly, Chiangmai Frozen 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 Chiangmai Frozen will offset losses from the drop in Chiangmai Frozen's long position.| Thaifoods Group vs. Thaifoods Group Public | Thaifoods Group vs. Thai President Foods | Thaifoods Group vs. Thai Capital | Thaifoods Group vs. Thaicom Public |
| Chiangmai Frozen vs. Chumporn Palm Oil | Chiangmai Frozen vs. GFPT Public | Chiangmai Frozen vs. Crown Seal Public | Chiangmai Frozen vs. Dynasty Ceramic 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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