Correlation Between CP ALL and Global Green
Can any of the company-specific risk be diversified away by investing in both CP ALL and Global Green 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 Global Green 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 Global Green Chemicals, you can compare the effects of market volatilities on CP ALL and Global Green 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 Global Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Global Green.
Diversification Opportunities for CP ALL and Global Green
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between CPALL and Global is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Global Green Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Green Chemicals 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 Global Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Green Chemicals has no effect on the direction of CP ALL i.e., CP ALL and Global Green go up and down completely randomly.
Pair Corralation between CP ALL and Global Green
Assuming the 90 days trading horizon CP ALL is expected to generate 488.32 times less return on investment than Global Green. But when comparing it to its historical volatility, CP ALL Public is 34.81 times less risky than Global Green. It trades about 0.0 of its potential returns per unit of risk. Global Green Chemicals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,449 in Global Green Chemicals on September 12, 2024 and sell it today you would lose (987.00) from holding Global Green Chemicals or give up 68.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Global Green Chemicals
Performance |
| Timeline |
| CP ALL Public |
| Global Green Chemicals |
CP ALL and Global Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Global Green
The main advantage of trading using opposite CP ALL and Global Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Global Green 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 Global Green will offset losses from the drop in Global Green'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 |
| Global Green vs. Ichitan Group Public | Global Green vs. Indorama Ventures PCL | Global Green vs. BCPG Public | Global Green vs. IRPC 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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