Correlation Between Chumporn Palm and CPL Group
Can any of the company-specific risk be diversified away by investing in both Chumporn Palm and CPL Group 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 CPL Group 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 CPL Group Public, you can compare the effects of market volatilities on Chumporn Palm and CPL Group 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 CPL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chumporn Palm and CPL Group.
Diversification Opportunities for Chumporn Palm and CPL Group
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chumporn and CPL is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chumporn Palm Oil and CPL Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPL Group 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 CPL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPL Group Public has no effect on the direction of Chumporn Palm i.e., Chumporn Palm and CPL Group go up and down completely randomly.
Pair Corralation between Chumporn Palm and CPL Group
Assuming the 90 days trading horizon Chumporn Palm Oil is expected to generate 1.46 times more return on investment than CPL Group. However, Chumporn Palm is 1.46 times more volatile than CPL Group Public. It trades about -0.21 of its potential returns per unit of risk. CPL Group Public is currently generating about -0.44 per unit of risk. If you would invest 324.00 in Chumporn Palm Oil on September 1, 2024 and sell it today you would lose (34.00) from holding Chumporn Palm Oil or give up 10.49% 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. CPL Group Public
Performance |
| Timeline |
| Chumporn Palm Oil |
| CPL Group Public |
Chumporn Palm and CPL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chumporn Palm and CPL Group
The main advantage of trading using opposite Chumporn Palm and CPL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chumporn Palm position performs unexpectedly, CPL Group 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 CPL Group will offset losses from the drop in CPL Group's long position.| Chumporn Palm vs. MK Restaurant Group | Chumporn Palm vs. TRC Construction Public | Chumporn Palm vs. Bangkok Expressway and | Chumporn Palm vs. Lohakit Metal Public |
| CPL Group vs. Castle Peak Holdings | CPL Group vs. Chumporn Palm Oil | CPL Group vs. Boutique Newcity Public | CPL Group vs. Crown Seal 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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