Correlation Between CPL Group and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both CPL Group and Chiangmai Frozen 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 CPL Group and Chiangmai Frozen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPL Group Public and Chiangmai Frozen Foods, you can compare the effects of market volatilities on CPL Group and Chiangmai Frozen 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 CPL Group with a short position of Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPL Group and Chiangmai Frozen.
Diversification Opportunities for CPL Group and Chiangmai Frozen
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CPL and Chiangmai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CPL Group Public and Chiangmai Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiangmai Frozen Foods and CPL Group 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 CPL Group Public are associated (or correlated) with Chiangmai Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiangmai Frozen Foods has no effect on the direction of CPL Group i.e., CPL Group and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between CPL Group and Chiangmai Frozen
Assuming the 90 days trading horizon CPL Group Public is expected to under-perform the Chiangmai Frozen. In addition to that, CPL Group is 1.2 times more volatile than Chiangmai Frozen Foods. It trades about -0.32 of its total potential returns per unit of risk. Chiangmai Frozen Foods is currently generating about -0.23 per unit of volatility. If you would invest 214.00 in Chiangmai Frozen Foods on September 3, 2024 and sell it today you would lose (12.00) from holding Chiangmai Frozen Foods or give up 5.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPL Group Public vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| CPL Group Public |
| Chiangmai Frozen Foods |
CPL Group and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPL Group and Chiangmai Frozen
The main advantage of trading using opposite CPL Group and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPL Group position performs unexpectedly, Chiangmai Frozen 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 Chiangmai Frozen will offset losses from the drop in Chiangmai Frozen's long position.| CPL Group vs. Castle Peak Holdings | CPL Group vs. Chumporn Palm Oil | CPL Group vs. Boutique Newcity Public | CPL Group vs. Crown Seal 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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