Correlation Between Central Pattana and Advanced Info
Can any of the company-specific risk be diversified away by investing in both Central Pattana and Advanced Info 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 Central Pattana and Advanced Info into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Pattana Public and Advanced Info Service, you can compare the effects of market volatilities on Central Pattana and Advanced Info 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 Central Pattana with a short position of Advanced Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Advanced Info.
Diversification Opportunities for Central Pattana and Advanced Info
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Central and Advanced is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Advanced Info Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Info Service and Central Pattana 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 Central Pattana Public are associated (or correlated) with Advanced Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Info Service has no effect on the direction of Central Pattana i.e., Central Pattana and Advanced Info go up and down completely randomly.
Pair Corralation between Central Pattana and Advanced Info
Assuming the 90 days trading horizon Central Pattana is expected to generate 398.0 times less return on investment than Advanced Info. In addition to that, Central Pattana is 1.2 times more volatile than Advanced Info Service. It trades about 0.0 of its total potential returns per unit of risk. Advanced Info Service is currently generating about 0.09 per unit of volatility. If you would invest 21,281 in Advanced Info Service on September 1, 2024 and sell it today you would earn a total of 7,219 from holding Advanced Info Service or generate 33.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Pattana Public vs. Advanced Info Service
Performance |
| Timeline |
| Central Pattana Public |
| Advanced Info Service |
Central Pattana and Advanced Info Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Advanced Info
The main advantage of trading using opposite Central Pattana and Advanced Info positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Advanced Info 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 Advanced Info will offset losses from the drop in Advanced Info's long position.| Central Pattana vs. CP ALL Public | Central Pattana vs. Bangkok Dusit Medical | Central Pattana vs. Airports of Thailand | Central Pattana vs. Advanced Info Service |
| Advanced Info vs. PTT Public | Advanced Info vs. CP ALL Public | Advanced Info vs. Kasikornbank Public | Advanced Info vs. Bangkok Bank 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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