Correlation Between CP ALL and Asia Hotel
Can any of the company-specific risk be diversified away by investing in both CP ALL and Asia Hotel 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 Asia Hotel 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 Asia Hotel Public, you can compare the effects of market volatilities on CP ALL and Asia Hotel 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 Asia Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Asia Hotel.
Diversification Opportunities for CP ALL and Asia Hotel
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CPALL and Asia is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Asia Hotel Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Hotel 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 Asia Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Hotel Public has no effect on the direction of CP ALL i.e., CP ALL and Asia Hotel go up and down completely randomly.
Pair Corralation between CP ALL and Asia Hotel
Assuming the 90 days trading horizon CP ALL is expected to generate 79.14 times less return on investment than Asia Hotel. But when comparing it to its historical volatility, CP ALL Public is 68.77 times less risky than Asia Hotel. It trades about 0.07 of its potential returns per unit of risk. Asia Hotel Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Asia Hotel Public on September 4, 2024 and sell it today you would earn a total of 38.00 from holding Asia Hotel Public or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Asia Hotel Public
Performance |
| Timeline |
| CP ALL Public |
| Asia Hotel Public |
CP ALL and Asia Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Asia Hotel
The main advantage of trading using opposite CP ALL and Asia Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Asia Hotel 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 Asia Hotel will offset losses from the drop in Asia Hotel's long position.| CP ALL vs. Airports of Thailand | CP ALL vs. PTT Public | CP ALL vs. Bangkok Dusit Medical | CP ALL vs. Kasikornbank Public |
| Asia Hotel vs. Central Pattana Public | Asia Hotel vs. CP ALL Public | Asia Hotel vs. Bangkok Dusit Medical | Asia Hotel vs. Airports of Thailand |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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