Correlation Between CP ALL and Newcity Public
Can any of the company-specific risk be diversified away by investing in both CP ALL and Newcity Public 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 Newcity Public 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 Newcity Public, you can compare the effects of market volatilities on CP ALL and Newcity Public 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 Newcity Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Newcity Public.
Diversification Opportunities for CP ALL and Newcity Public
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CPALL and Newcity is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Newcity Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcity 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 Newcity Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcity Public has no effect on the direction of CP ALL i.e., CP ALL and Newcity Public go up and down completely randomly.
Pair Corralation between CP ALL and Newcity Public
Assuming the 90 days trading horizon CP ALL is expected to generate 267.15 times less return on investment than Newcity Public. But when comparing it to its historical volatility, CP ALL Public is 40.49 times less risky than Newcity Public. It trades about 0.01 of its potential returns per unit of risk. Newcity Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 976.00 in Newcity Public on September 4, 2024 and sell it today you would lose (682.00) from holding Newcity Public or give up 69.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Newcity Public
Performance |
| Timeline |
| CP ALL Public |
| Newcity Public |
CP ALL and Newcity Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Newcity Public
The main advantage of trading using opposite CP ALL and Newcity Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Newcity Public 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 Newcity Public will offset losses from the drop in Newcity Public'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 |
| Newcity Public vs. Central Pattana Public | Newcity Public vs. CP ALL Public | Newcity Public vs. Bangkok Dusit Medical | Newcity Public 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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