Correlation Between CPR Gomu and Mena Transport
Can any of the company-specific risk be diversified away by investing in both CPR Gomu and Mena Transport 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 Mena Transport 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 Mena Transport Public, you can compare the effects of market volatilities on CPR Gomu and Mena Transport 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 Mena Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and Mena Transport.
Diversification Opportunities for CPR Gomu and Mena Transport
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CPR and Mena is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial and Mena Transport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mena Transport Public 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 Mena Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mena Transport Public has no effect on the direction of CPR Gomu i.e., CPR Gomu and Mena Transport go up and down completely randomly.
Pair Corralation between CPR Gomu and Mena Transport
Assuming the 90 days trading horizon CPR Gomu Industrial is expected to generate 1.51 times more return on investment than Mena Transport. However, CPR Gomu is 1.51 times more volatile than Mena Transport Public. It trades about 0.11 of its potential returns per unit of risk. Mena Transport Public is currently generating about 0.0 per unit of risk. If you would invest 284.00 in CPR Gomu Industrial on September 2, 2024 and sell it today you would earn a total of 74.00 from holding CPR Gomu Industrial or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPR Gomu Industrial vs. Mena Transport Public
Performance |
| Timeline |
| CPR Gomu Industrial |
| Mena Transport Public |
CPR Gomu and Mena Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPR Gomu and Mena Transport
The main advantage of trading using opposite CPR Gomu and Mena Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu position performs unexpectedly, Mena Transport 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 Mena Transport will offset losses from the drop in Mena Transport'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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