Correlation Between CP ALL and Premier Marketing
Can any of the company-specific risk be diversified away by investing in both CP ALL and Premier Marketing 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 Premier Marketing 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 Premier Marketing Public, you can compare the effects of market volatilities on CP ALL and Premier Marketing 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 Premier Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Premier Marketing.
Diversification Opportunities for CP ALL and Premier Marketing
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CPALL and Premier is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Premier Marketing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Marketing 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 Premier Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Marketing Public has no effect on the direction of CP ALL i.e., CP ALL and Premier Marketing go up and down completely randomly.
Pair Corralation between CP ALL and Premier Marketing
Assuming the 90 days trading horizon CP ALL is expected to generate 2.16 times less return on investment than Premier Marketing. In addition to that, CP ALL is 1.03 times more volatile than Premier Marketing Public. It trades about 0.01 of its total potential returns per unit of risk. Premier Marketing Public is currently generating about 0.03 per unit of volatility. If you would invest 836.00 in Premier Marketing Public on August 24, 2024 and sell it today you would earn a total of 109.00 from holding Premier Marketing Public or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Premier Marketing Public
Performance |
| Timeline |
| CP ALL Public |
| Premier Marketing Public |
CP ALL and Premier Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Premier Marketing
The main advantage of trading using opposite CP ALL and Premier Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Premier Marketing 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 Premier Marketing will offset losses from the drop in Premier Marketing'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 |
| Premier Marketing vs. CP ALL Public | Premier Marketing vs. Carabao Group Public | Premier Marketing vs. Thai Union Group | Premier Marketing vs. Minor International 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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