Correlation Between Com7 PCL and Asian Sea
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Asian Sea 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 Com7 PCL and Asian Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Asian Sea, you can compare the effects of market volatilities on Com7 PCL and Asian Sea 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 Com7 PCL with a short position of Asian Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Asian Sea.
Diversification Opportunities for Com7 PCL and Asian Sea
Very good diversification
The 3 months correlation between Com7 and Asian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Asian Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Sea and Com7 PCL 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 Com7 PCL are associated (or correlated) with Asian Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Sea has no effect on the direction of Com7 PCL i.e., Com7 PCL and Asian Sea go up and down completely randomly.
Pair Corralation between Com7 PCL and Asian Sea
Assuming the 90 days trading horizon Com7 PCL is expected to generate 2.43 times more return on investment than Asian Sea. However, Com7 PCL is 2.43 times more volatile than Asian Sea. It trades about -0.01 of its potential returns per unit of risk. Asian Sea is currently generating about -0.22 per unit of risk. If you would invest 2,675 in Com7 PCL on August 24, 2024 and sell it today you would lose (50.00) from holding Com7 PCL or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. Asian Sea
Performance |
| Timeline |
| Com7 PCL |
| Asian Sea |
Com7 PCL and Asian Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Asian Sea
The main advantage of trading using opposite Com7 PCL and Asian Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Asian Sea 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 Asian Sea will offset losses from the drop in Asian Sea's long position.| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
| Asian Sea vs. GFPT Public | Asian Sea vs. Carabao Group Public | Asian Sea vs. Thai Union Group | Asian Sea vs. Agripure Holdings 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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