Correlation Between Com7 PCL and Mega Lifesciences
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Mega Lifesciences 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 Mega Lifesciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Mega Lifesciences Public, you can compare the effects of market volatilities on Com7 PCL and Mega Lifesciences 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 Mega Lifesciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Mega Lifesciences.
Diversification Opportunities for Com7 PCL and Mega Lifesciences
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Com7 and Mega is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Mega Lifesciences Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Lifesciences Public 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 Mega Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Lifesciences Public has no effect on the direction of Com7 PCL i.e., Com7 PCL and Mega Lifesciences go up and down completely randomly.
Pair Corralation between Com7 PCL and Mega Lifesciences
Assuming the 90 days trading horizon Com7 PCL is expected to generate 1.38 times more return on investment than Mega Lifesciences. However, Com7 PCL is 1.38 times more volatile than Mega Lifesciences Public. It trades about -0.01 of its potential returns per unit of risk. Mega Lifesciences Public is currently generating about -0.04 per unit of risk. If you would invest 2,336 in Com7 PCL on January 17, 2025 and sell it today you would lose (416.00) from holding Com7 PCL or give up 17.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. Mega Lifesciences Public
Performance |
| Timeline |
| Com7 PCL |
| Mega Lifesciences Public |
Com7 PCL and Mega Lifesciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Mega Lifesciences
The main advantage of trading using opposite Com7 PCL and Mega Lifesciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Mega Lifesciences 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 Mega Lifesciences will offset losses from the drop in Mega Lifesciences' 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 |
| Mega Lifesciences vs. Home Product Center | Mega Lifesciences vs. Minor International Public | Mega Lifesciences vs. Com7 PCL | Mega Lifesciences vs. Bangkok Dusit Medical |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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