Correlation Between CI Group and CPR Gomu
Can any of the company-specific risk be diversified away by investing in both CI Group and CPR Gomu 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 CI Group and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Group Public and CPR Gomu Industrial, you can compare the effects of market volatilities on CI Group and CPR Gomu 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 CI Group with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Group and CPR Gomu.
Diversification Opportunities for CI Group and CPR Gomu
Very weak diversification
The 3 months correlation between CIG and CPR is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CI Group Public and CPR Gomu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPR Gomu Industrial and CI Group 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 CI Group Public are associated (or correlated) with CPR Gomu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPR Gomu Industrial has no effect on the direction of CI Group i.e., CI Group and CPR Gomu go up and down completely randomly.
Pair Corralation between CI Group and CPR Gomu
Assuming the 90 days trading horizon CI Group Public is expected to generate 14.48 times more return on investment than CPR Gomu. However, CI Group is 14.48 times more volatile than CPR Gomu Industrial. It trades about 0.04 of its potential returns per unit of risk. CPR Gomu Industrial is currently generating about 0.01 per unit of risk. If you would invest 50.00 in CI Group Public on August 30, 2024 and sell it today you would lose (45.00) from holding CI Group Public or give up 90.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Group Public vs. CPR Gomu Industrial
Performance |
| Timeline |
| CI Group Public |
| CPR Gomu Industrial |
CI Group and CPR Gomu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Group and CPR Gomu
The main advantage of trading using opposite CI Group and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Group position performs unexpectedly, CPR Gomu 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 CPR Gomu will offset losses from the drop in CPR Gomu's long position.| CI Group vs. ASIA Capital Group | CI Group vs. Cho Thavee Public | CI Group vs. CMO Public | CI Group vs. CPR Gomu Industrial |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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