Correlation Between CP ALL and Agripure Holdings
Can any of the company-specific risk be diversified away by investing in both CP ALL and Agripure Holdings 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 CP ALL and Agripure Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CP ALL Public and Agripure Holdings Public, you can compare the effects of market volatilities on CP ALL and Agripure Holdings 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 CP ALL with a short position of Agripure Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Agripure Holdings.
Diversification Opportunities for CP ALL and Agripure Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CPALL and Agripure is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Agripure Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripure Holdings Public and CP ALL 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 CP ALL Public are associated (or correlated) with Agripure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripure Holdings Public has no effect on the direction of CP ALL i.e., CP ALL and Agripure Holdings go up and down completely randomly.
Pair Corralation between CP ALL and Agripure Holdings
Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Agripure Holdings. But the stock apears to be less risky and, when comparing its historical volatility, CP ALL Public is 1.57 times less risky than Agripure Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The Agripure Holdings Public is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 422.00 in Agripure Holdings Public on August 25, 2024 and sell it today you would lose (2.00) from holding Agripure Holdings Public or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Agripure Holdings Public
Performance |
| Timeline |
| CP ALL Public |
| Agripure Holdings Public |
CP ALL and Agripure Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Agripure Holdings
The main advantage of trading using opposite CP ALL and Agripure Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Agripure Holdings 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 Agripure Holdings will offset losses from the drop in Agripure Holdings' long position.| CP ALL vs. Airports of Thailand | CP ALL vs. PTT Public | CP ALL vs. Bangkok Dusit Medical | CP ALL vs. Kasikornbank Public |
| Agripure Holdings vs. CP ALL Public | Agripure Holdings vs. Carabao Group Public | Agripure Holdings vs. Thai Union Group | Agripure Holdings vs. Minor International 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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