Correlation Between Union Auction and Com7 PCL
Can any of the company-specific risk be diversified away by investing in both Union Auction and Com7 PCL 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 Union Auction and Com7 PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Auction Public and Com7 PCL, you can compare the effects of market volatilities on Union Auction and Com7 PCL 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 Union Auction with a short position of Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Auction and Com7 PCL.
Diversification Opportunities for Union Auction and Com7 PCL
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Union and Com7 is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Union Auction Public and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL and Union Auction 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 Union Auction Public are associated (or correlated) with Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of Union Auction i.e., Union Auction and Com7 PCL go up and down completely randomly.
Pair Corralation between Union Auction and Com7 PCL
Assuming the 90 days trading horizon Union Auction Public is expected to under-perform the Com7 PCL. But the stock apears to be less risky and, when comparing its historical volatility, Union Auction Public is 2.71 times less risky than Com7 PCL. The stock trades about -0.45 of its potential returns per unit of risk. The Com7 PCL is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Com7 PCL on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Com7 PCL or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Auction Public vs. Com7 PCL
Performance |
| Timeline |
| Union Auction Public |
| Com7 PCL |
Union Auction and Com7 PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Auction and Com7 PCL
The main advantage of trading using opposite Union Auction and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Auction position performs unexpectedly, Com7 PCL 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 Com7 PCL will offset losses from the drop in Com7 PCL's long position.| Union Auction vs. AP Public | Union Auction vs. Carabao Group Public | Union Auction vs. Forth Smart Service | Union Auction vs. Com7 PCL |
| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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