Correlation Between CP ALL and Thai Nam
Can any of the company-specific risk be diversified away by investing in both CP ALL and Thai Nam 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 Thai Nam 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 Thai Nam Plastic, you can compare the effects of market volatilities on CP ALL and Thai Nam 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 Thai Nam. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Thai Nam.
Diversification Opportunities for CP ALL and Thai Nam
Very weak diversification
The 3 months correlation between CPALL and Thai is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Thai Nam Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Nam Plastic 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 Thai Nam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Nam Plastic has no effect on the direction of CP ALL i.e., CP ALL and Thai Nam go up and down completely randomly.
Pair Corralation between CP ALL and Thai Nam
Assuming the 90 days trading horizon CP ALL is expected to generate 1157.93 times less return on investment than Thai Nam. But when comparing it to its historical volatility, CP ALL Public is 34.95 times less risky than Thai Nam. It trades about 0.0 of its potential returns per unit of risk. Thai Nam Plastic is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 199.00 in Thai Nam Plastic on September 3, 2024 and sell it today you would lose (107.00) from holding Thai Nam Plastic or give up 53.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Thai Nam Plastic
Performance |
| Timeline |
| CP ALL Public |
| Thai Nam Plastic |
CP ALL and Thai Nam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Thai Nam
The main advantage of trading using opposite CP ALL and Thai Nam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Thai Nam 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 Thai Nam will offset losses from the drop in Thai Nam'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 |
| Thai Nam vs. PTT Public | Thai Nam vs. PTT Exploration and | Thai Nam vs. The Siam Cement | Thai Nam vs. CP ALL 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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