Correlation Between VGI Public and Chonburi Concrete
Can any of the company-specific risk be diversified away by investing in both VGI Public and Chonburi Concrete 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 VGI Public and Chonburi Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and Chonburi Concrete Product, you can compare the effects of market volatilities on VGI Public and Chonburi Concrete 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 VGI Public with a short position of Chonburi Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and Chonburi Concrete.
Diversification Opportunities for VGI Public and Chonburi Concrete
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VGI and Chonburi is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and Chonburi Concrete Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chonburi Concrete Product and VGI Public 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 VGI Public are associated (or correlated) with Chonburi Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chonburi Concrete Product has no effect on the direction of VGI Public i.e., VGI Public and Chonburi Concrete go up and down completely randomly.
Pair Corralation between VGI Public and Chonburi Concrete
Assuming the 90 days trading horizon VGI Public is expected to generate 1.41 times more return on investment than Chonburi Concrete. However, VGI Public is 1.41 times more volatile than Chonburi Concrete Product. It trades about 0.08 of its potential returns per unit of risk. Chonburi Concrete Product is currently generating about 0.06 per unit of risk. If you would invest 286.00 in VGI Public on August 25, 2024 and sell it today you would lose (22.00) from holding VGI Public or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
VGI Public vs. Chonburi Concrete Product
Performance |
| Timeline |
| VGI Public |
| Chonburi Concrete Product |
VGI Public and Chonburi Concrete Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and Chonburi Concrete
The main advantage of trading using opposite VGI Public and Chonburi Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public position performs unexpectedly, Chonburi Concrete 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 Chonburi Concrete will offset losses from the drop in Chonburi Concrete's long position.| VGI Public vs. Delta Electronics Public | VGI Public vs. Delta Electronics Public | VGI Public vs. Airports of Thailand | VGI Public vs. Airports of Thailand |
| Chonburi Concrete vs. Dynasty Ceramic Public | Chonburi Concrete vs. Cal Comp Electronics Public | Chonburi Concrete vs. AP Public | Chonburi Concrete vs. Dcon Products 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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