Correlation Between Central Pattana and Global Power

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Can any of the company-specific risk be diversified away by investing in both Central Pattana and Global Power 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 Global Power 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 Global Power Synergy, you can compare the effects of market volatilities on Central Pattana and Global Power 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 Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Global Power.

Diversification Opportunities for Central Pattana and Global Power

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Central and Global is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Global Power Synergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Synergy 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 Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Synergy has no effect on the direction of Central Pattana i.e., Central Pattana and Global Power go up and down completely randomly.

Pair Corralation between Central Pattana and Global Power

Assuming the 90 days trading horizon Central Pattana Public is expected to generate 0.69 times more return on investment than Global Power. However, Central Pattana Public is 1.46 times less risky than Global Power. It trades about -0.01 of its potential returns per unit of risk. Global Power Synergy is currently generating about -0.02 per unit of risk. If you would invest  6,685  in Central Pattana Public on August 31, 2024 and sell it today you would lose (685.00) from holding Central Pattana Public or give up 10.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.73%
ValuesDaily Returns

Central Pattana Public  vs.  Global Power Synergy

 Performance 
       Timeline  
Central Pattana Public 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Central Pattana Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Central Pattana is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
Global Power Synergy 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Global Power Synergy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Global Power may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Central Pattana and Global Power Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Central Pattana and Global Power

The main advantage of trading using opposite Central Pattana and Global Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Global Power 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 Global Power will offset losses from the drop in Global Power's long position.
The idea behind Central Pattana Public and Global Power Synergy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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