Correlation Between Central Pattana and Sabina Public
Can any of the company-specific risk be diversified away by investing in both Central Pattana and Sabina Public 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 Sabina Public 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 Sabina Public, you can compare the effects of market volatilities on Central Pattana and Sabina Public 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 Sabina Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Sabina Public.
Diversification Opportunities for Central Pattana and Sabina Public
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Central and Sabina is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Sabina Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabina 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 Sabina Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabina Public has no effect on the direction of Central Pattana i.e., Central Pattana and Sabina Public go up and down completely randomly.
Pair Corralation between Central Pattana and Sabina Public
Assuming the 90 days trading horizon Central Pattana is expected to generate 71.07 times less return on investment than Sabina Public. But when comparing it to its historical volatility, Central Pattana Public is 61.9 times less risky than Sabina Public. It trades about 0.09 of its potential returns per unit of risk. Sabina Public is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,047 in Sabina Public on September 4, 2024 and sell it today you would earn a total of 73.00 from holding Sabina Public or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Pattana Public vs. Sabina Public
Performance |
| Timeline |
| Central Pattana Public |
| Sabina Public |
Central Pattana and Sabina Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Sabina Public
The main advantage of trading using opposite Central Pattana and Sabina Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Sabina Public 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 Sabina Public will offset losses from the drop in Sabina Public'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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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