Correlation Between Central Pattana and Grande Asset
Can any of the company-specific risk be diversified away by investing in both Central Pattana and Grande Asset 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 Grande Asset 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 Grande Asset Hotels, you can compare the effects of market volatilities on Central Pattana and Grande Asset 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 Grande Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Grande Asset.
Diversification Opportunities for Central Pattana and Grande Asset
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Grande is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Grande Asset Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Asset Hotels 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 Grande Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Asset Hotels has no effect on the direction of Central Pattana i.e., Central Pattana and Grande Asset go up and down completely randomly.
Pair Corralation between Central Pattana and Grande Asset
Assuming the 90 days trading horizon Central Pattana Public is expected to generate 0.22 times more return on investment than Grande Asset. However, Central Pattana Public is 4.62 times less risky than Grande Asset. It trades about -0.15 of its potential returns per unit of risk. Grande Asset Hotels is currently generating about -0.1 per unit of risk. If you would invest 6,400 in Central Pattana Public on August 29, 2024 and sell it today you would lose (325.00) from holding Central Pattana Public or give up 5.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Central Pattana Public vs. Grande Asset Hotels
Performance |
| Timeline |
| Central Pattana Public |
| Grande Asset Hotels |
Central Pattana and Grande Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Grande Asset
The main advantage of trading using opposite Central Pattana and Grande Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Grande Asset 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 Grande Asset will offset losses from the drop in Grande Asset's long position.| Central Pattana vs. Eastern Star Real | Central Pattana vs. Bangkok Land Public | Central Pattana vs. Ananda Development Public | Central Pattana vs. Better World Green |
| Grande Asset vs. CP ALL Public | Grande Asset vs. Bangkok Dusit Medical | Grande Asset vs. Central Pattana Public | Grande Asset vs. Advanced Info Service |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |