Correlation Between CPL Group and Chumporn Palm
Can any of the company-specific risk be diversified away by investing in both CPL Group and Chumporn 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 CPL Group and Chumporn Palm 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 Chumporn Palm Oil, you can compare the effects of market volatilities on CPL Group and Chumporn 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 CPL Group with a short position of Chumporn Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPL Group and Chumporn Palm.
Diversification Opportunities for CPL Group and Chumporn Palm
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CPL and Chumporn is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CPL Group Public and Chumporn Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chumporn Palm Oil 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 Chumporn Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chumporn Palm Oil has no effect on the direction of CPL Group i.e., CPL Group and Chumporn Palm go up and down completely randomly.
Pair Corralation between CPL Group and Chumporn Palm
Assuming the 90 days trading horizon CPL Group Public is expected to under-perform the Chumporn Palm. But the stock apears to be less risky and, when comparing its historical volatility, CPL Group Public is 1.46 times less risky than Chumporn Palm. The stock trades about -0.44 of its potential returns per unit of risk. The Chumporn Palm Oil is currently generating about -0.21 of returns per unit of risk over similar time horizon. 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 |
CPL Group Public vs. Chumporn Palm Oil
Performance |
| Timeline |
| CPL Group Public |
| Chumporn Palm Oil |
CPL Group and Chumporn Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPL Group and Chumporn Palm
The main advantage of trading using opposite CPL Group and Chumporn Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPL Group position performs unexpectedly, Chumporn 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 Chumporn Palm will offset losses from the drop in Chumporn Palm'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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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