Correlation Between CIMB Thai and Rojana Industrial
Can any of the company-specific risk be diversified away by investing in both CIMB Thai and Rojana Industrial 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 CIMB Thai and Rojana Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIMB Thai Bank and Rojana Industrial Park, you can compare the effects of market volatilities on CIMB Thai and Rojana Industrial 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 CIMB Thai with a short position of Rojana Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and Rojana Industrial.
Diversification Opportunities for CIMB Thai and Rojana Industrial
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CIMB and Rojana is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and Rojana Industrial Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rojana Industrial Park and CIMB Thai 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 CIMB Thai Bank are associated (or correlated) with Rojana Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rojana Industrial Park has no effect on the direction of CIMB Thai i.e., CIMB Thai and Rojana Industrial go up and down completely randomly.
Pair Corralation between CIMB Thai and Rojana Industrial
Assuming the 90 days trading horizon CIMB Thai Bank is expected to generate 46.84 times more return on investment than Rojana Industrial. However, CIMB Thai is 46.84 times more volatile than Rojana Industrial Park. It trades about 0.1 of its potential returns per unit of risk. Rojana Industrial Park is currently generating about 0.01 per unit of risk. If you would invest 0.00 in CIMB Thai Bank on November 2, 2024 and sell it today you would earn a total of 49.00 from holding CIMB Thai Bank or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.03% |
| Values | Daily Returns |
CIMB Thai Bank vs. Rojana Industrial Park
Performance |
| Timeline |
| CIMB Thai Bank |
| Rojana Industrial Park |
CIMB Thai and Rojana Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIMB Thai and Rojana Industrial
The main advantage of trading using opposite CIMB Thai and Rojana Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMB Thai position performs unexpectedly, Rojana Industrial 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 Rojana Industrial will offset losses from the drop in Rojana Industrial's long position.| CIMB Thai vs. Bank of Ayudhya | CIMB Thai vs. Krung Thai Bank | CIMB Thai vs. Kiatnakin Phatra Bank | CIMB Thai vs. Asia Aviation Public |
| Rojana Industrial vs. Kiattana Transport Public | Rojana Industrial vs. Copperwired Public | Rojana Industrial vs. Mena Transport Public | Rojana Industrial vs. K W Metal |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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