Correlation Between CPL Group and Rich Sport
Can any of the company-specific risk be diversified away by investing in both CPL Group and Rich Sport 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 Rich Sport 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 Rich Sport Public, you can compare the effects of market volatilities on CPL Group and Rich Sport 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 Rich Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPL Group and Rich Sport.
Diversification Opportunities for CPL Group and Rich Sport
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CPL and Rich is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CPL Group Public and Rich Sport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rich Sport 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 Rich Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rich Sport Public has no effect on the direction of CPL Group i.e., CPL Group and Rich Sport go up and down completely randomly.
Pair Corralation between CPL Group and Rich Sport
Assuming the 90 days trading horizon CPL Group Public is expected to under-perform the Rich Sport. In addition to that, CPL Group is 1.05 times more volatile than Rich Sport Public. It trades about -0.29 of its total potential returns per unit of risk. Rich Sport Public is currently generating about 0.05 per unit of volatility. If you would invest 191.00 in Rich Sport Public on September 14, 2024 and sell it today you would earn a total of 2.00 from holding Rich Sport Public or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPL Group Public vs. Rich Sport Public
Performance |
| Timeline |
| CPL Group Public |
| Rich Sport Public |
CPL Group and Rich Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPL Group and Rich Sport
The main advantage of trading using opposite CPL Group and Rich Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPL Group position performs unexpectedly, Rich Sport 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 Rich Sport will offset losses from the drop in Rich Sport's long position.| CPL Group vs. Hwa Fong Rubber | CPL Group vs. AAPICO Hitech Public | CPL Group vs. Haad Thip Public | CPL Group vs. Italian Thai Development Public |
| Rich Sport vs. Samart Public | Rich Sport vs. Jasmine International Public | Rich Sport vs. Jay Mart Public | Rich Sport vs. MC Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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