Correlation Between CP ALL and SCB X
Can any of the company-specific risk be diversified away by investing in both CP ALL and SCB X 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 SCB X 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 SCB X Public, you can compare the effects of market volatilities on CP ALL and SCB X 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 SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and SCB X.
Diversification Opportunities for CP ALL and SCB X
Pay attention - limited upside
The 3 months correlation between CPALL and SCB is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X 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 SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of CP ALL i.e., CP ALL and SCB X go up and down completely randomly.
Pair Corralation between CP ALL and SCB X
Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the SCB X. In addition to that, CP ALL is 1.87 times more volatile than SCB X Public. It trades about -0.18 of its total potential returns per unit of risk. SCB X Public is currently generating about 0.17 per unit of volatility. If you would invest 11,500 in SCB X Public on October 26, 2024 and sell it today you would earn a total of 750.00 from holding SCB X Public or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. SCB X Public
Performance |
| Timeline |
| CP ALL Public |
| SCB X Public |
CP ALL and SCB X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and SCB X
The main advantage of trading using opposite CP ALL and SCB X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, SCB X 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 SCB X will offset losses from the drop in SCB X'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 |
| SCB X vs. JD Food PCL | SCB X vs. Food Moments PCL | SCB X vs. The Navakij Insurance | SCB X vs. Thai President Foods |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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