Correlation Between Vichitbhan Palmoil and Tong Hua
Can any of the company-specific risk be diversified away by investing in both Vichitbhan Palmoil and Tong Hua 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 Vichitbhan Palmoil and Tong Hua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vichitbhan Palmoil Public and Tong Hua Holding, you can compare the effects of market volatilities on Vichitbhan Palmoil and Tong Hua 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 Vichitbhan Palmoil with a short position of Tong Hua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vichitbhan Palmoil and Tong Hua.
Diversification Opportunities for Vichitbhan Palmoil and Tong Hua
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vichitbhan and Tong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vichitbhan Palmoil Public and Tong Hua Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Hua Holding and Vichitbhan Palmoil 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 Vichitbhan Palmoil Public are associated (or correlated) with Tong Hua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Hua Holding has no effect on the direction of Vichitbhan Palmoil i.e., Vichitbhan Palmoil and Tong Hua go up and down completely randomly.
Pair Corralation between Vichitbhan Palmoil and Tong Hua
Assuming the 90 days trading horizon Vichitbhan Palmoil Public is expected to generate 1.0 times more return on investment than Tong Hua. However, Vichitbhan Palmoil is 1.0 times more volatile than Tong Hua Holding. It trades about 0.05 of its potential returns per unit of risk. Tong Hua Holding is currently generating about 0.05 per unit of risk. If you would invest 91.00 in Vichitbhan Palmoil Public on August 29, 2024 and sell it today you would lose (31.00) from holding Vichitbhan Palmoil Public or give up 34.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vichitbhan Palmoil Public vs. Tong Hua Holding
Performance |
| Timeline |
| Vichitbhan Palmoil Public |
| Tong Hua Holding |
Vichitbhan Palmoil and Tong Hua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vichitbhan Palmoil and Tong Hua
The main advantage of trading using opposite Vichitbhan Palmoil and Tong Hua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vichitbhan Palmoil position performs unexpectedly, Tong Hua 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 Tong Hua will offset losses from the drop in Tong Hua's long position.| Vichitbhan Palmoil vs. Chumporn Palm Oil | Vichitbhan Palmoil vs. Taokaenoi Food Marketing | Vichitbhan Palmoil vs. Tata Steel Public | Vichitbhan Palmoil vs. Wave Entertainment Public |
| Tong Hua vs. Synnex Public | Tong Hua vs. SVI Public | Tong Hua vs. Interlink Communication Public | Tong Hua vs. SCG PACKAGING PCL NVDR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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