Correlation Between CK Power and Praram 9
Can any of the company-specific risk be diversified away by investing in both CK Power and Praram 9 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 CK Power and Praram 9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Power Public and Praram 9 Hospital, you can compare the effects of market volatilities on CK Power and Praram 9 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 CK Power with a short position of Praram 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Praram 9.
Diversification Opportunities for CK Power and Praram 9
Excellent diversification
The 3 months correlation between CKP and Praram is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Praram 9 Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praram 9 Hospital and CK Power 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 CK Power Public are associated (or correlated) with Praram 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praram 9 Hospital has no effect on the direction of CK Power i.e., CK Power and Praram 9 go up and down completely randomly.
Pair Corralation between CK Power and Praram 9
Assuming the 90 days trading horizon CK Power is expected to generate 5.4 times less return on investment than Praram 9. In addition to that, CK Power is 1.15 times more volatile than Praram 9 Hospital. It trades about 0.02 of its total potential returns per unit of risk. Praram 9 Hospital is currently generating about 0.13 per unit of volatility. If you would invest 1,478 in Praram 9 Hospital on September 1, 2024 and sell it today you would earn a total of 1,097 from holding Praram 9 Hospital or generate 74.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Power Public vs. Praram 9 Hospital
Performance |
| Timeline |
| CK Power Public |
| Praram 9 Hospital |
CK Power and Praram 9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Praram 9
The main advantage of trading using opposite CK Power and Praram 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Praram 9 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 Praram 9 will offset losses from the drop in Praram 9's long position.| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
| Praram 9 vs. Bangkok Dusit Medical | Praram 9 vs. Bumrungrad Hospital Public | Praram 9 vs. Bangkok Chain Hospital | Praram 9 vs. Rajthanee Hospital 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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