Correlation Between Visa and CH Karnchang
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and CH Karnchang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and CH Karnchang Public, you can compare the effects of market volatilities on Visa 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 Visa with a short position of CH Karnchang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and CH Karnchang.
Diversification Opportunities for Visa and CH Karnchang
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and CH Karnchang is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and CH Karnchang go up and down completely randomly.
Pair Corralation between Visa and CH Karnchang
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.77 times more return on investment than CH Karnchang. However, Visa Class A is 1.3 times less risky than CH Karnchang. It trades about 0.34 of its potential returns per unit of risk. CH Karnchang Public is currently generating about -0.09 per unit of risk. If you would invest 28,365 in Visa Class A on August 29, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. CH Karnchang Public
Performance |
| Timeline |
| Visa Class A |
| CH Karnchang Public |
Visa and CH Karnchang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and CH Karnchang
The main advantage of trading using opposite Visa and CH Karnchang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| CH Karnchang vs. Tata Steel Public | CH Karnchang vs. Thaifoods Group Public | CH Karnchang vs. TMT Steel Public | CH Karnchang vs. The Erawan Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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