Correlation Between Chumporn Palm and Castle Peak
Can any of the company-specific risk be diversified away by investing in both Chumporn Palm and Castle Peak 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 Castle Peak 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 Castle Peak Holdings, you can compare the effects of market volatilities on Chumporn Palm and Castle Peak 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 Castle Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chumporn Palm and Castle Peak.
Diversification Opportunities for Chumporn Palm and Castle Peak
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chumporn and Castle is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Chumporn Palm Oil and Castle Peak Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castle Peak Holdings 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 Castle Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castle Peak Holdings has no effect on the direction of Chumporn Palm i.e., Chumporn Palm and Castle Peak go up and down completely randomly.
Pair Corralation between Chumporn Palm and Castle Peak
Assuming the 90 days trading horizon Chumporn Palm Oil is expected to generate 0.72 times more return on investment than Castle Peak. However, Chumporn Palm Oil is 1.39 times less risky than Castle Peak. It trades about -0.19 of its potential returns per unit of risk. Castle Peak Holdings is currently generating about -0.49 per unit of risk. If you would invest 320.00 in Chumporn Palm Oil on September 3, 2024 and sell it today you would lose (30.00) from holding Chumporn Palm Oil or give up 9.37% 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. Castle Peak Holdings
Performance |
| Timeline |
| Chumporn Palm Oil |
| Castle Peak Holdings |
Chumporn Palm and Castle Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chumporn Palm and Castle Peak
The main advantage of trading using opposite Chumporn Palm and Castle Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chumporn Palm position performs unexpectedly, Castle Peak 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 Castle Peak will offset losses from the drop in Castle Peak's long position.| Chumporn Palm vs. Airports of Thailand | Chumporn Palm vs. PTT Public | Chumporn Palm vs. Bangkok Dusit Medical | Chumporn Palm vs. Kasikornbank Public |
| Castle Peak vs. Central Pattana Public | Castle Peak vs. CP ALL Public | Castle Peak vs. Bangkok Dusit Medical | Castle Peak vs. Airports of Thailand |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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