Correlation Between Asia Fiber and CPL Group
Can any of the company-specific risk be diversified away by investing in both Asia Fiber and CPL Group 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 Asia Fiber and CPL Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Fiber Public and CPL Group Public, you can compare the effects of market volatilities on Asia Fiber and CPL Group 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 Asia Fiber with a short position of CPL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Fiber and CPL Group.
Diversification Opportunities for Asia Fiber and CPL Group
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and CPL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asia Fiber Public and CPL Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPL Group Public and Asia Fiber 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 Asia Fiber Public are associated (or correlated) with CPL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPL Group Public has no effect on the direction of Asia Fiber i.e., Asia Fiber and CPL Group go up and down completely randomly.
Pair Corralation between Asia Fiber and CPL Group
Assuming the 90 days trading horizon Asia Fiber Public is expected to generate 1.0 times more return on investment than CPL Group. However, Asia Fiber is 1.0 times more volatile than CPL Group Public. It trades about 0.07 of its potential returns per unit of risk. CPL Group Public is currently generating about 0.07 per unit of risk. If you would invest 498.00 in Asia Fiber Public on September 3, 2024 and sell it today you would lose (18.00) from holding Asia Fiber Public or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.37% |
| Values | Daily Returns |
Asia Fiber Public vs. CPL Group Public
Performance |
| Timeline |
| Asia Fiber Public |
| CPL Group Public |
Asia Fiber and CPL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Fiber and CPL Group
The main advantage of trading using opposite Asia Fiber and CPL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Fiber position performs unexpectedly, CPL Group 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 CPL Group will offset losses from the drop in CPL Group's long position.| Asia Fiber vs. Central Pattana Public | Asia Fiber vs. CP ALL Public | Asia Fiber vs. Bangkok Dusit Medical | Asia Fiber vs. Airports of Thailand |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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