Correlation Between CH Karnchang and VGI Public

Can any of the company-specific risk be diversified away by investing in both CH Karnchang and VGI Public 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 VGI Public 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 VGI Public, you can compare the effects of market volatilities on CH Karnchang and VGI Public 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 VGI Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CH Karnchang and VGI Public.

Diversification Opportunities for CH Karnchang and VGI Public

0.17

Correlation Coefficient

CH Karnchang  VGI Public

Average diversification

The 3 months correlation between CH Karnchang and VGI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CH Karnchang Public and VGI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGI Public 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 VGI Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGI Public has no effect on the direction of CH Karnchang i.e., CH Karnchang and VGI Public go up and down completely randomly.

Pair Corralation between CH Karnchang and VGI Public

Assuming the 90 days horizon CH Karnchang Public is expected to under-perform the VGI Public. But the stock apears to be less risky and, when comparing its historical volatility, CH Karnchang Public is 2.24 times less risky than VGI Public. The stock trades about -0.08 of its potential returns per unit of risk. The VGI Public is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  238.00  in VGI Public on September 25, 2024 and sell it today you would earn a total of  82.00  from holding VGI Public or generate 34.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CH Karnchang Public  vs.  VGI Public

CH Karnchang Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CH Karnchang Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

VGI Public

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VGI Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, VGI Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CH Karnchang and VGI Public

The main advantage of trading using opposite CH Karnchang and VGI Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Karnchang position performs unexpectedly, VGI Public 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 VGI Public will offset losses from the drop in VGI Public's long position.

The idea behind CH Karnchang Public and VGI Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.