Correlation Between Central Pattana and Surapon Foods
Can any of the company-specific risk be diversified away by investing in both Central Pattana and Surapon Foods 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 Surapon Foods 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 Surapon Foods Public, you can compare the effects of market volatilities on Central Pattana and Surapon Foods 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 Surapon Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and Surapon Foods.
Diversification Opportunities for Central Pattana and Surapon Foods
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Central and Surapon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and Surapon Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surapon Foods 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 Surapon Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surapon Foods Public has no effect on the direction of Central Pattana i.e., Central Pattana and Surapon Foods go up and down completely randomly.
Pair Corralation between Central Pattana and Surapon Foods
Assuming the 90 days trading horizon Central Pattana Public is expected to under-perform the Surapon Foods. In addition to that, Central Pattana is 1.14 times more volatile than Surapon Foods Public. It trades about -0.19 of its total potential returns per unit of risk. Surapon Foods Public is currently generating about 0.01 per unit of volatility. If you would invest 695.00 in Surapon Foods Public on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Surapon Foods Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Pattana Public vs. Surapon Foods Public
Performance |
| Timeline |
| Central Pattana Public |
| Surapon Foods Public |
Central Pattana and Surapon Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and Surapon Foods
The main advantage of trading using opposite Central Pattana and Surapon Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, Surapon Foods 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 Surapon Foods will offset losses from the drop in Surapon Foods' 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 Stocks Directory module to find actively traded stocks across global markets.
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