Correlation Between Central Pattana and Haad Thip
Can any of the company-specific risk be diversified away by investing in both Central Pattana and Haad Thip 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 Haad Thip 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 Haad Thip Public, you can compare the effects of market volatilities on Central Pattana and Haad Thip 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 Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Haad Thip.
Diversification Opportunities for Central Pattana and Haad Thip
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Haad is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip Public 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 Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Central Pattana i.e., Central Pattana and Haad Thip go up and down completely randomly.
Pair Corralation between Central Pattana and Haad Thip
Assuming the 90 days trading horizon Central Pattana Public is expected to under-perform the Haad Thip. But the stock apears to be less risky and, when comparing its historical volatility, Central Pattana Public is 1.11 times less risky than Haad Thip. The stock trades about -0.04 of its potential returns per unit of risk. The Haad Thip Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,406 in Haad Thip Public on November 19, 2024 and sell it today you would earn a total of 214.00 from holding Haad Thip Public or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Central Pattana Public vs. Haad Thip Public
Performance |
| Timeline |
| Central Pattana Public |
| Haad Thip Public |
Central Pattana and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Haad Thip
The main advantage of trading using opposite Central Pattana and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Haad Thip 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 Haad Thip will offset losses from the drop in Haad Thip'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 |
| Haad Thip vs. Charoen Pokphand Foods | Haad Thip vs. Carabao Group Public | Haad Thip vs. Home Product Center | Haad Thip vs. Ichitan 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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