Correlation Between CP ALL and Univanich Palm
Can any of the company-specific risk be diversified away by investing in both CP ALL and Univanich Palm 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 Univanich Palm 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 Univanich Palm Oil, you can compare the effects of market volatilities on CP ALL and Univanich Palm 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 Univanich Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP ALL and Univanich Palm.
Diversification Opportunities for CP ALL and Univanich Palm
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CPALL and Univanich is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Univanich Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univanich Palm Oil 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 Univanich Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univanich Palm Oil has no effect on the direction of CP ALL i.e., CP ALL and Univanich Palm go up and down completely randomly.
Pair Corralation between CP ALL and Univanich Palm
Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Univanich Palm. But the stock apears to be less risky and, when comparing its historical volatility, CP ALL Public is 1.02 times less risky than Univanich Palm. The stock trades about -0.08 of its potential returns per unit of risk. The Univanich Palm Oil is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 880.00 in Univanich Palm Oil on August 26, 2024 and sell it today you would earn a total of 45.00 from holding Univanich Palm Oil or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CP ALL Public vs. Univanich Palm Oil
Performance |
| Timeline |
| CP ALL Public |
| Univanich Palm Oil |
CP ALL and Univanich Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP ALL and Univanich Palm
The main advantage of trading using opposite CP ALL and Univanich Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP ALL position performs unexpectedly, Univanich Palm 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 Univanich Palm will offset losses from the drop in Univanich Palm's long position.The idea behind CP ALL Public and Univanich Palm Oil pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Univanich Palm vs. Thai Union Group | Univanich Palm vs. Minor International Public | Univanich Palm vs. Central Pattana 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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