Correlation Between Central Plaza and Klinique Med
Can any of the company-specific risk be diversified away by investing in both Central Plaza and Klinique Med 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 Central Plaza and Klinique Med into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Plaza Hotel and The Klinique Med, you can compare the effects of market volatilities on Central Plaza and Klinique Med 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 Central Plaza with a short position of Klinique Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plaza and Klinique Med.
Diversification Opportunities for Central Plaza and Klinique Med
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Central and Klinique is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Central Plaza Hotel and The Klinique Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klinique Med and Central Plaza 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 Central Plaza Hotel are associated (or correlated) with Klinique Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klinique Med has no effect on the direction of Central Plaza i.e., Central Plaza and Klinique Med go up and down completely randomly.
Pair Corralation between Central Plaza and Klinique Med
Assuming the 90 days trading horizon Central Plaza Hotel is expected to generate 0.98 times more return on investment than Klinique Med. However, Central Plaza Hotel is 1.03 times less risky than Klinique Med. It trades about -0.02 of its potential returns per unit of risk. The Klinique Med is currently generating about -0.04 per unit of risk. If you would invest 4,259 in Central Plaza Hotel on August 27, 2024 and sell it today you would lose (459.00) from holding Central Plaza Hotel or give up 10.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Plaza Hotel vs. The Klinique Med
Performance |
| Timeline |
| Central Plaza Hotel |
| Klinique Med |
Central Plaza and Klinique Med Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plaza and Klinique Med
The main advantage of trading using opposite Central Plaza and Klinique Med positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plaza position performs unexpectedly, Klinique Med 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 Klinique Med will offset losses from the drop in Klinique Med's long position.| Central Plaza vs. SCB X Public | Central Plaza vs. Kasikornbank Public | Central Plaza vs. PTT Public | Central Plaza vs. Kasikornbank Public |
| Klinique Med vs. Minor International Public | Klinique Med vs. Central Plaza Hotel | Klinique Med vs. The Erawan Group | Klinique Med vs. After You 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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