Correlation Between Com7 PCL and Next Capital
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Next Capital 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 Next Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Next Capital Public, you can compare the effects of market volatilities on Com7 PCL and Next Capital 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 Next Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Next Capital.
Diversification Opportunities for Com7 PCL and Next Capital
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Com7 and Next is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Next Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Capital 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 Next Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Capital Public has no effect on the direction of Com7 PCL i.e., Com7 PCL and Next Capital go up and down completely randomly.
Pair Corralation between Com7 PCL and Next Capital
Assuming the 90 days trading horizon Com7 PCL is expected to generate 0.9 times more return on investment than Next Capital. However, Com7 PCL is 1.11 times less risky than Next Capital. It trades about 0.03 of its potential returns per unit of risk. Next Capital Public is currently generating about -0.16 per unit of risk. If you would invest 2,675 in Com7 PCL on August 25, 2024 and sell it today you would earn a total of 25.00 from holding Com7 PCL or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Com7 PCL vs. Next Capital Public
Performance |
| Timeline |
| Com7 PCL |
| Next Capital Public |
Com7 PCL and Next Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Next Capital
The main advantage of trading using opposite Com7 PCL and Next Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Next Capital 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 Next Capital will offset losses from the drop in Next Capital'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 |
| Next Capital vs. Muangthai Capital Public | Next Capital vs. Com7 PCL | Next Capital vs. Chayo Group Public | Next Capital vs. JMT Network Services |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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