Correlation Between CPR Gomu and Communication System
Can any of the company-specific risk be diversified away by investing in both CPR Gomu and Communication System 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 Communication System 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 Communication System Solution, you can compare the effects of market volatilities on CPR Gomu and Communication System 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 Communication System. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and Communication System.
Diversification Opportunities for CPR Gomu and Communication System
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CPR and Communication is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial and Communication System Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication System 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 Communication System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication System has no effect on the direction of CPR Gomu i.e., CPR Gomu and Communication System go up and down completely randomly.
Pair Corralation between CPR Gomu and Communication System
Assuming the 90 days trading horizon CPR Gomu Industrial is expected to generate 1.02 times more return on investment than Communication System. However, CPR Gomu is 1.02 times more volatile than Communication System Solution. It trades about 0.29 of its potential returns per unit of risk. Communication System Solution is currently generating about 0.11 per unit of risk. If you would invest 290.00 in CPR Gomu Industrial on August 30, 2024 and sell it today you would earn a total of 80.00 from holding CPR Gomu Industrial or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CPR Gomu Industrial vs. Communication System Solution
Performance |
| Timeline |
| CPR Gomu Industrial |
| Communication System |
CPR Gomu and Communication System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPR Gomu and Communication System
The main advantage of trading using opposite CPR Gomu and Communication System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu position performs unexpectedly, Communication System 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 Communication System will offset losses from the drop in Communication System'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 |
| Communication System vs. Chularat Hospital Public | Communication System vs. Cal Comp Electronics Public | Communication System vs. Dynasty Ceramic 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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