Correlation Between Central Pattana and TCM Public
Can any of the company-specific risk be diversified away by investing in both Central Pattana and TCM 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 TCM 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 TCM Public, you can compare the effects of market volatilities on Central Pattana and TCM 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 TCM Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and TCM Public.
Diversification Opportunities for Central Pattana and TCM Public
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and TCM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and TCM Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCM 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 TCM Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCM Public has no effect on the direction of Central Pattana i.e., Central Pattana and TCM Public go up and down completely randomly.
Pair Corralation between Central Pattana and TCM Public
Assuming the 90 days trading horizon Central Pattana Public is expected to under-perform the TCM Public. But the stock apears to be less risky and, when comparing its historical volatility, Central Pattana Public is 1.62 times less risky than TCM Public. The stock trades about -0.19 of its potential returns per unit of risk. The TCM Public is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 73.00 in TCM Public on September 12, 2024 and sell it today you would lose (2.00) from holding TCM Public or give up 2.74% 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. TCM Public
Performance |
| Timeline |
| Central Pattana Public |
| TCM Public |
Central Pattana and TCM Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pattana and TCM Public
The main advantage of trading using opposite Central Pattana and TCM Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pattana position performs unexpectedly, TCM 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 TCM Public will offset losses from the drop in TCM 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 |
| TCM Public vs. STPI Public | TCM Public vs. Thai Vegetable Oil | TCM Public vs. Tycoons Worldwide Group | TCM Public vs. Ratchthani Leasing 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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