Correlation Between CPL Group and Crown Seal
Can any of the company-specific risk be diversified away by investing in both CPL Group and Crown Seal 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 Crown Seal 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 Crown Seal Public, you can compare the effects of market volatilities on CPL Group and Crown Seal 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 Crown Seal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPL Group and Crown Seal.
Diversification Opportunities for CPL Group and Crown Seal
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CPL and Crown is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CPL Group Public and Crown Seal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Seal Public 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 Crown Seal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Seal Public has no effect on the direction of CPL Group i.e., CPL Group and Crown Seal go up and down completely randomly.
Pair Corralation between CPL Group and Crown Seal
Assuming the 90 days trading horizon CPL Group Public is expected to under-perform the Crown Seal. In addition to that, CPL Group is 5.42 times more volatile than Crown Seal Public. It trades about -0.08 of its total potential returns per unit of risk. Crown Seal Public is currently generating about 0.0 per unit of volatility. If you would invest 4,550 in Crown Seal Public on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Crown Seal Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CPL Group Public vs. Crown Seal Public
Performance |
| Timeline |
| CPL Group Public |
| Crown Seal Public |
CPL Group and Crown Seal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPL Group and Crown Seal
The main advantage of trading using opposite CPL Group and Crown Seal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPL Group position performs unexpectedly, Crown Seal 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 Crown Seal will offset losses from the drop in Crown Seal'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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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