Correlation Between CPR Gomu and Grande Asset
Can any of the company-specific risk be diversified away by investing in both CPR Gomu and Grande Asset 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 Grande Asset 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 Grande Asset Hotels, you can compare the effects of market volatilities on CPR Gomu and Grande Asset 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 Grande Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and Grande Asset.
Diversification Opportunities for CPR Gomu and Grande Asset
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CPR and Grande is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial and Grande Asset Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Asset Hotels 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 Grande Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Asset Hotels has no effect on the direction of CPR Gomu i.e., CPR Gomu and Grande Asset go up and down completely randomly.
Pair Corralation between CPR Gomu and Grande Asset
Assuming the 90 days trading horizon CPR Gomu is expected to generate 100.41 times less return on investment than Grande Asset. But when comparing it to its historical volatility, CPR Gomu Industrial is 30.13 times less risky than Grande Asset. It trades about 0.02 of its potential returns per unit of risk. Grande Asset Hotels is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Grande Asset Hotels on September 3, 2024 and sell it today you would lose (4.00) from holding Grande Asset Hotels or give up 30.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPR Gomu Industrial vs. Grande Asset Hotels
Performance |
| Timeline |
| CPR Gomu Industrial |
| Grande Asset Hotels |
CPR Gomu and Grande Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPR Gomu and Grande Asset
The main advantage of trading using opposite CPR Gomu and Grande Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu position performs unexpectedly, Grande Asset 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 Grande Asset will offset losses from the drop in Grande Asset'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 |
| Grande Asset vs. Central Pattana Public | Grande Asset vs. CP ALL Public | Grande Asset vs. Bangkok Dusit Medical | Grande Asset vs. Airports of Thailand |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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