Correlation Between CP ALL and Peoples Garment
Can any of the company-specific risk be diversified away by investing in both CP ALL and Peoples Garment 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 Peoples Garment 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 Peoples Garment Public, you can compare the effects of market volatilities on CP ALL and Peoples Garment 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 Peoples Garment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Peoples Garment.
Diversification Opportunities for CP ALL and Peoples Garment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CPALL and Peoples is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Peoples Garment Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Garment 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 Peoples Garment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Garment Public has no effect on the direction of CP ALL i.e., CP ALL and Peoples Garment go up and down completely randomly.
Pair Corralation between CP ALL and Peoples Garment
Assuming the 90 days trading horizon CP ALL is expected to generate 195.59 times less return on investment than Peoples Garment. But when comparing it to its historical volatility, CP ALL Public is 34.81 times less risky than Peoples Garment. It trades about 0.01 of its potential returns per unit of risk. Peoples Garment Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 687.00 in Peoples Garment Public on September 5, 2024 and sell it today you would earn a total of 208.00 from holding Peoples Garment Public or generate 30.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
CP ALL Public vs. Peoples Garment Public
Performance |
| Timeline |
| CP ALL Public |
| Peoples Garment Public |
CP ALL and Peoples Garment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Peoples Garment
The main advantage of trading using opposite CP ALL and Peoples Garment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Peoples Garment 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 Peoples Garment will offset losses from the drop in Peoples Garment'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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