Correlation Between CP ALL and Thai Packaging
Can any of the company-specific risk be diversified away by investing in both CP ALL and Thai Packaging 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 Packaging 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 Packaging Printing, you can compare the effects of market volatilities on CP ALL and Thai Packaging 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 Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Thai Packaging.
Diversification Opportunities for CP ALL and Thai Packaging
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between CPALL and Thai is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Thai Packaging Printing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Packaging Printing 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 Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Packaging Printing has no effect on the direction of CP ALL i.e., CP ALL and Thai Packaging go up and down completely randomly.
Pair Corralation between CP ALL and Thai Packaging
Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Thai Packaging. But the stock apears to be less risky and, when comparing its historical volatility, CP ALL Public is 113.13 times less risky than Thai Packaging. The stock trades about -0.03 of its potential returns per unit of risk. The Thai Packaging Printing is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Thai Packaging Printing on September 12, 2024 and sell it today you would lose (50.00) from holding Thai Packaging Printing or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
CP ALL Public vs. Thai Packaging Printing
Performance |
| Timeline |
| CP ALL Public |
| Thai Packaging Printing |
CP ALL and Thai Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Thai Packaging
The main advantage of trading using opposite CP ALL and Thai Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Thai Packaging 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 Packaging will offset losses from the drop in Thai Packaging'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 Packaging vs. Thai Nam Plastic | Thai Packaging vs. Thantawan Industry Public | Thai Packaging vs. Thai Poly Acrylic | Thai Packaging vs. Thai Rung Union |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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