Correlation Between CH Karnchang and Airports
Can any of the company-specific risk be diversified away by investing in both CH Karnchang and Airports 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 CH Karnchang and Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CH Karnchang Public and Airports of Thailand, you can compare the effects of market volatilities on CH Karnchang and Airports 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 CH Karnchang with a short position of Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of CH Karnchang and Airports.
Diversification Opportunities for CH Karnchang and Airports
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CH Karnchang and Airports is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CH Karnchang Public and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand and CH Karnchang 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 CH Karnchang Public are associated (or correlated) with Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of CH Karnchang i.e., CH Karnchang and Airports go up and down completely randomly.
Pair Corralation between CH Karnchang and Airports
Assuming the 90 days horizon CH Karnchang Public is expected to generate 1.89 times more return on investment than Airports. However, CH Karnchang is 1.89 times more volatile than Airports of Thailand. It trades about -0.02 of its potential returns per unit of risk. Airports of Thailand is currently generating about -0.19 per unit of risk. If you would invest 1,840 in CH Karnchang Public on September 24, 2024 and sell it today you would lose (20.00) from holding CH Karnchang Public or give up 1.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CH Karnchang Public vs. Airports of Thailand
Performance |
Timeline |
CH Karnchang Public |
Airports of Thailand |
CH Karnchang and Airports Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CH Karnchang and Airports
The main advantage of trading using opposite CH Karnchang and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Karnchang position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.CH Karnchang vs. Land and Houses | CH Karnchang vs. Krung Thai Bank | CH Karnchang vs. Bangkok Bank Public | CH Karnchang vs. The Siam Cement |
Airports vs. Land and Houses | Airports vs. CH Karnchang Public | Airports vs. Krung Thai Bank | Airports vs. Bangkok Bank 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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