Correlation Between CP ALL and Thai Poly
Can any of the company-specific risk be diversified away by investing in both CP ALL and Thai Poly 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 Poly 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 Poly Acrylic, you can compare the effects of market volatilities on CP ALL and Thai Poly 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 Poly. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Thai Poly.
Diversification Opportunities for CP ALL and Thai Poly
Weak diversification
The 3 months correlation between CPALL and Thai is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Thai Poly Acrylic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Poly Acrylic 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 Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Poly Acrylic has no effect on the direction of CP ALL i.e., CP ALL and Thai Poly go up and down completely randomly.
Pair Corralation between CP ALL and Thai Poly
Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Thai Poly. But the stock apears to be less risky and, when comparing its historical volatility, CP ALL Public is 35.7 times less risky than Thai Poly. The stock trades about -0.02 of its potential returns per unit of risk. The Thai Poly Acrylic is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 591.00 in Thai Poly Acrylic on August 31, 2024 and sell it today you would lose (203.00) from holding Thai Poly Acrylic or give up 34.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
CP ALL Public vs. Thai Poly Acrylic
Performance |
| Timeline |
| CP ALL Public |
| Thai Poly Acrylic |
CP ALL and Thai Poly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Thai Poly
The main advantage of trading using opposite CP ALL and Thai Poly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Thai Poly 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 Poly will offset losses from the drop in Thai Poly'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 Poly vs. AAPICO Hitech Public | Thai Poly vs. AP Public | Thai Poly vs. Aikchol Hospital Public | Thai Poly vs. Bank of Ayudhya |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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