Correlation Between Com7 PCL and Nova Organic
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Nova Organic 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 Nova Organic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Nova Organic PCL, you can compare the effects of market volatilities on Com7 PCL and Nova Organic 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 Nova Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Nova Organic.
Diversification Opportunities for Com7 PCL and Nova Organic
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Com7 and Nova is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Nova Organic PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Organic PCL 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 Nova Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Organic PCL has no effect on the direction of Com7 PCL i.e., Com7 PCL and Nova Organic go up and down completely randomly.
Pair Corralation between Com7 PCL and Nova Organic
Assuming the 90 days trading horizon Com7 PCL is expected to generate 0.64 times more return on investment than Nova Organic. However, Com7 PCL is 1.56 times less risky than Nova Organic. It trades about 0.1 of its potential returns per unit of risk. Nova Organic PCL is currently generating about -0.07 per unit of risk. If you would invest 1,910 in Com7 PCL on September 3, 2024 and sell it today you would earn a total of 740.00 from holding Com7 PCL or generate 38.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Com7 PCL vs. Nova Organic PCL
Performance |
| Timeline |
| Com7 PCL |
| Nova Organic PCL |
Com7 PCL and Nova Organic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Com7 PCL and Nova Organic
The main advantage of trading using opposite Com7 PCL and Nova Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Nova Organic 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 Nova Organic will offset losses from the drop in Nova Organic's long position.| Com7 PCL vs. Central Pattana Public | Com7 PCL vs. CP ALL Public | Com7 PCL vs. Bangkok Dusit Medical | Com7 PCL vs. Airports of Thailand |
| Nova Organic vs. Kingsmen CMTI Public | Nova Organic vs. Hydrotek Public | Nova Organic vs. Karmarts Public | Nova Organic vs. KC Metalsheet 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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