Correlation Between CP ALL and Minor International
Can any of the company-specific risk be diversified away by investing in both CP ALL and Minor International 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 Minor International 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 Minor International Public, you can compare the effects of market volatilities on CP ALL and Minor International 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 Minor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Minor International.
Diversification Opportunities for CP ALL and Minor International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CPALL and Minor is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Minor International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minor International 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 Minor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minor International has no effect on the direction of CP ALL i.e., CP ALL and Minor International go up and down completely randomly.
Pair Corralation between CP ALL and Minor International
Assuming the 90 days trading horizon CP ALL Public is expected to generate 0.81 times more return on investment than Minor International. However, CP ALL Public is 1.23 times less risky than Minor International. It trades about 0.01 of its potential returns per unit of risk. Minor International Public is currently generating about -0.02 per unit of risk. If you would invest 6,216 in CP ALL Public on August 28, 2024 and sell it today you would earn a total of 109.00 from holding CP ALL Public or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
CP ALL Public vs. Minor International Public
Performance |
| Timeline |
| CP ALL Public |
| Minor International |
CP ALL and Minor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Minor International
The main advantage of trading using opposite CP ALL and Minor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Minor International 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 Minor International will offset losses from the drop in Minor International'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 |
| Minor International vs. CP ALL Public | Minor International vs. Bangkok Dusit Medical | Minor International vs. Airports of Thailand | Minor International vs. Kasikornbank 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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