Correlation Between Com7 PCL and Klinique Med
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Klinique Med 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 Klinique Med into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and The Klinique Med, you can compare the effects of market volatilities on Com7 PCL and Klinique Med 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 Klinique Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Klinique Med.
Diversification Opportunities for Com7 PCL and Klinique Med
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Com7 and Klinique is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and The Klinique Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klinique Med 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 Klinique Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klinique Med has no effect on the direction of Com7 PCL i.e., Com7 PCL and Klinique Med go up and down completely randomly.
Pair Corralation between Com7 PCL and Klinique Med
Assuming the 90 days trading horizon Com7 PCL is expected to generate 0.99 times more return on investment than Klinique Med. However, Com7 PCL is 1.01 times less risky than Klinique Med. It trades about 0.01 of its potential returns per unit of risk. The Klinique Med is currently generating about -0.06 per unit of risk. If you would invest 2,180 in Com7 PCL on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Com7 PCL or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. The Klinique Med
Performance |
| Timeline |
| Com7 PCL |
| Klinique Med |
Com7 PCL and Klinique Med Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Klinique Med
The main advantage of trading using opposite Com7 PCL and Klinique Med positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Klinique Med 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 Klinique Med will offset losses from the drop in Klinique Med'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 |
| Klinique Med vs. Com7 PCL | Klinique Med vs. Gunkul Engineering Public | Klinique Med vs. i Tail Corp PCL | Klinique Med vs. Sappe 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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