Correlation Between Central Pattana and Ocean Glass
Can any of the company-specific risk be diversified away by investing in both Central Pattana and Ocean Glass 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 Ocean Glass 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 Ocean Glass Public, you can compare the effects of market volatilities on Central Pattana and Ocean Glass 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 Ocean Glass. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Ocean Glass.
Diversification Opportunities for Central Pattana and Ocean Glass
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and Ocean is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Ocean Glass Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocean Glass 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 Ocean Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocean Glass Public has no effect on the direction of Central Pattana i.e., Central Pattana and Ocean Glass go up and down completely randomly.
Pair Corralation between Central Pattana and Ocean Glass
Assuming the 90 days trading horizon Central Pattana Public is expected to generate 0.85 times more return on investment than Ocean Glass. However, Central Pattana Public is 1.17 times less risky than Ocean Glass. It trades about -0.19 of its potential returns per unit of risk. Ocean Glass Public is currently generating about -0.31 per unit of risk. If you would invest 6,300 in Central Pattana Public on September 12, 2024 and sell it today you would lose (325.00) from holding Central Pattana Public or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Pattana Public vs. Ocean Glass Public
Performance |
| Timeline |
| Central Pattana Public |
| Ocean Glass Public |
Central Pattana and Ocean Glass Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Ocean Glass
The main advantage of trading using opposite Central Pattana and Ocean Glass positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Ocean Glass 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 Ocean Glass will offset losses from the drop in Ocean Glass' 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 |
| Ocean Glass vs. Hwa Fong Rubber | Ocean Glass vs. AAPICO Hitech Public | Ocean Glass vs. Haad Thip Public | Ocean Glass vs. Italian Thai Development 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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