Correlation Between CP ALL and Surapon Foods
Can any of the company-specific risk be diversified away by investing in both CP ALL and Surapon Foods 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 Surapon Foods 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 Surapon Foods Public, you can compare the effects of market volatilities on CP ALL and Surapon Foods 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 Surapon Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Surapon Foods.
Diversification Opportunities for CP ALL and Surapon Foods
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between CPALL and Surapon is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Surapon Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surapon Foods 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 Surapon Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surapon Foods Public has no effect on the direction of CP ALL i.e., CP ALL and Surapon Foods go up and down completely randomly.
Pair Corralation between CP ALL and Surapon Foods
Assuming the 90 days trading horizon CP ALL is expected to generate 119.28 times less return on investment than Surapon Foods. But when comparing it to its historical volatility, CP ALL Public is 34.89 times less risky than Surapon Foods. It trades about 0.01 of its potential returns per unit of risk. Surapon Foods Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 790.00 in Surapon Foods Public on August 24, 2024 and sell it today you would lose (110.00) from holding Surapon Foods Public or give up 13.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Surapon Foods Public
Performance |
| Timeline |
| CP ALL Public |
| Surapon Foods Public |
CP ALL and Surapon Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Surapon Foods
The main advantage of trading using opposite CP ALL and Surapon Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Surapon Foods 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 Surapon Foods will offset losses from the drop in Surapon Foods' long position.| CP ALL vs. Airports of Thailand | CP ALL vs. PTT Public | CP ALL vs. Bangkok Dusit Medical | CP ALL vs. Kasikornbank Public |
| Surapon Foods vs. CP ALL Public | Surapon Foods vs. Carabao Group Public | Surapon Foods vs. Thai Union Group | Surapon Foods 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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