Correlation Between Central Plaza and SCB X
Can any of the company-specific risk be diversified away by investing in both Central Plaza and SCB X 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 SCB X 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 SCB X Public, you can compare the effects of market volatilities on Central Plaza and SCB X 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 SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plaza and SCB X.
Diversification Opportunities for Central Plaza and SCB X
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Central and SCB is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Central Plaza Hotel and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X Public 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 SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Central Plaza i.e., Central Plaza and SCB X go up and down completely randomly.
Pair Corralation between Central Plaza and SCB X
Assuming the 90 days trading horizon Central Plaza Hotel is expected to generate 3.09 times more return on investment than SCB X. However, Central Plaza is 3.09 times more volatile than SCB X Public. It trades about 0.08 of its potential returns per unit of risk. SCB X Public is currently generating about 0.0 per unit of risk. If you would invest 3,575 in Central Plaza Hotel on August 28, 2024 and sell it today you would earn a total of 125.00 from holding Central Plaza Hotel or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Plaza Hotel vs. SCB X Public
Performance |
| Timeline |
| Central Plaza Hotel |
| SCB X Public |
Central Plaza and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plaza and SCB X
The main advantage of trading using opposite Central Plaza and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plaza position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X's long position.| Central Plaza vs. SCB X Public | Central Plaza vs. Kasikornbank Public | Central Plaza vs. PTT Public | Central Plaza vs. Kasikornbank Public |
| SCB X vs. Thai Energy Storage | SCB X vs. Royal Orchid Hotel | SCB X vs. Grand Canal Land | SCB X vs. PRG 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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