Correlation Between Central Pattana and Land
Can any of the company-specific risk be diversified away by investing in both Central Pattana and Land 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 Land 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 Land and Houses, you can compare the effects of market volatilities on Central Pattana and Land 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 Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Land.
Diversification Opportunities for Central Pattana and Land
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Central and Land is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses 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 Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of Central Pattana i.e., Central Pattana and Land go up and down completely randomly.
Pair Corralation between Central Pattana and Land
Assuming the 90 days trading horizon Central Pattana Public is expected to generate 1.09 times more return on investment than Land. However, Central Pattana is 1.09 times more volatile than Land and Houses. It trades about -0.16 of its potential returns per unit of risk. Land and Houses is currently generating about -0.24 per unit of risk. If you would invest 5,650 in Central Pattana Public on November 3, 2024 and sell it today you would lose (350.00) from holding Central Pattana Public or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Pattana Public vs. Land and Houses
Performance |
| Timeline |
| Central Pattana Public |
| Land and Houses |
Central Pattana and Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Land
The main advantage of trading using opposite Central Pattana and Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Land 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 Land will offset losses from the drop in Land'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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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