Correlation Between CIMB Thai and Workpoint Entertainment
Can any of the company-specific risk be diversified away by investing in both CIMB Thai and Workpoint Entertainment 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 Workpoint Entertainment 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 Workpoint Entertainment Public, you can compare the effects of market volatilities on CIMB Thai and Workpoint Entertainment 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 Workpoint Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and Workpoint Entertainment.
Diversification Opportunities for CIMB Thai and Workpoint Entertainment
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CIMB and Workpoint is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and Workpoint Entertainment Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workpoint Entertainment 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 Workpoint Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workpoint Entertainment has no effect on the direction of CIMB Thai i.e., CIMB Thai and Workpoint Entertainment go up and down completely randomly.
Pair Corralation between CIMB Thai and Workpoint Entertainment
Assuming the 90 days trading horizon CIMB Thai Bank is expected to generate 1.22 times more return on investment than Workpoint Entertainment. However, CIMB Thai is 1.22 times more volatile than Workpoint Entertainment Public. It trades about -0.23 of its potential returns per unit of risk. Workpoint Entertainment Public is currently generating about -0.42 per unit of risk. If you would invest 45.00 in CIMB Thai Bank on October 20, 2024 and sell it today you would lose (4.00) from holding CIMB Thai Bank or give up 8.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIMB Thai Bank vs. Workpoint Entertainment Public
Performance |
| Timeline |
| CIMB Thai Bank |
| Workpoint Entertainment |
CIMB Thai and Workpoint Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIMB Thai and Workpoint Entertainment
The main advantage of trading using opposite CIMB Thai and Workpoint Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMB Thai position performs unexpectedly, Workpoint Entertainment 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 Workpoint Entertainment will offset losses from the drop in Workpoint Entertainment'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 |
| Workpoint Entertainment vs. Siamgas and Petrochemicals | Workpoint Entertainment vs. Namyong Terminal PCL | Workpoint Entertainment vs. MCOT Public | Workpoint Entertainment vs. The Erawan Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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