Correlation Between Chumporn Palm and CP ALL
Can any of the company-specific risk be diversified away by investing in both Chumporn Palm and CP ALL 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 Chumporn Palm and CP ALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chumporn Palm Oil and CP ALL Public, you can compare the effects of market volatilities on Chumporn Palm and CP ALL 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 Chumporn Palm with a short position of CP ALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chumporn Palm and CP ALL.
Diversification Opportunities for Chumporn Palm and CP ALL
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chumporn and CPALL is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chumporn Palm Oil and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public and Chumporn Palm 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 Chumporn Palm Oil are associated (or correlated) with CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of Chumporn Palm i.e., Chumporn Palm and CP ALL go up and down completely randomly.
Pair Corralation between Chumporn Palm and CP ALL
Assuming the 90 days trading horizon Chumporn Palm Oil is expected to generate 0.72 times more return on investment than CP ALL. However, Chumporn Palm Oil is 1.39 times less risky than CP ALL. It trades about -0.02 of its potential returns per unit of risk. CP ALL Public is currently generating about -0.18 per unit of risk. If you would invest 298.00 in Chumporn Palm Oil on November 18, 2024 and sell it today you would lose (8.00) from holding Chumporn Palm Oil or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chumporn Palm Oil vs. CP ALL Public
Performance |
| Timeline |
| Chumporn Palm Oil |
| CP ALL Public |
Chumporn Palm and CP ALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chumporn Palm and CP ALL
The main advantage of trading using opposite Chumporn Palm and CP ALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chumporn Palm position performs unexpectedly, CP ALL 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 CP ALL will offset losses from the drop in CP ALL's long position.| Chumporn Palm vs. Univanich Palm Oil | Chumporn Palm vs. Chiangmai Frozen Foods | Chumporn Palm vs. Dynasty Ceramic Public | Chumporn Palm vs. GFPT Public |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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