Correlation Between CPR Gomu and Central Retail
Can any of the company-specific risk be diversified away by investing in both CPR Gomu and Central Retail 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 CPR Gomu and Central Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPR Gomu Industrial and Central Retail, you can compare the effects of market volatilities on CPR Gomu and Central Retail 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 CPR Gomu with a short position of Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and Central Retail.
Diversification Opportunities for CPR Gomu and Central Retail
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CPR and Central is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail and CPR Gomu 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 CPR Gomu Industrial are associated (or correlated) with Central Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of CPR Gomu i.e., CPR Gomu and Central Retail go up and down completely randomly.
Pair Corralation between CPR Gomu and Central Retail
Assuming the 90 days trading horizon CPR Gomu Industrial is expected to generate 0.98 times more return on investment than Central Retail. However, CPR Gomu Industrial is 1.02 times less risky than Central Retail. It trades about 0.11 of its potential returns per unit of risk. Central Retail is currently generating about -0.33 per unit of risk. If you would invest 252.00 in CPR Gomu Industrial on January 5, 2025 and sell it today you would earn a total of 14.00 from holding CPR Gomu Industrial or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CPR Gomu Industrial vs. Central Retail
Performance |
| Timeline |
| CPR Gomu Industrial |
| Central Retail |
CPR Gomu and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPR Gomu and Central Retail
The main advantage of trading using opposite CPR Gomu and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu position performs unexpectedly, Central Retail 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 Central Retail will offset losses from the drop in Central Retail's long position.| CPR Gomu vs. Salee Colour Public | CPR Gomu vs. Business Online PCL | CPR Gomu vs. Communication System Solution | CPR Gomu vs. CI Group Public |
| Central Retail vs. Union Plastic Public | Central Retail vs. Ratchaphruek Hospital Public | Central Retail vs. Siamgas and Petrochemicals | Central Retail vs. Muang Thai Insurance |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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