Correlation Between CPR Gomu and NSL Foods
Can any of the company-specific risk be diversified away by investing in both CPR Gomu and NSL Foods 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 NSL Foods 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 NSL Foods Public, you can compare the effects of market volatilities on CPR Gomu and NSL Foods 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 NSL Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and NSL Foods.
Diversification Opportunities for CPR Gomu and NSL Foods
Very good diversification
The 3 months correlation between CPR and NSL is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial and NSL Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSL Foods 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 NSL Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSL Foods Public has no effect on the direction of CPR Gomu i.e., CPR Gomu and NSL Foods go up and down completely randomly.
Pair Corralation between CPR Gomu and NSL Foods
Assuming the 90 days trading horizon CPR Gomu Industrial is expected to generate 1.16 times more return on investment than NSL Foods. However, CPR Gomu is 1.16 times more volatile than NSL Foods Public. It trades about 0.03 of its potential returns per unit of risk. NSL Foods Public is currently generating about 0.0 per unit of risk. If you would invest 317.00 in CPR Gomu Industrial on September 19, 2024 and sell it today you would earn a total of 15.00 from holding CPR Gomu Industrial or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPR Gomu Industrial vs. NSL Foods Public
Performance |
| Timeline |
| CPR Gomu Industrial |
| NSL Foods Public |
CPR Gomu and NSL Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPR Gomu and NSL Foods
The main advantage of trading using opposite CPR Gomu and NSL Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu position performs unexpectedly, NSL Foods 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 NSL Foods will offset losses from the drop in NSL Foods' long position.| CPR Gomu vs. Thoresen Thai Agencies | CPR Gomu vs. Sri Trang Agro Industry | CPR Gomu vs. TPI Polene Public | CPR Gomu vs. Ratchthani Leasing Public |
| NSL Foods vs. Asia Metal Public | NSL Foods vs. PINTHONG INDUSTRIAL PARK | NSL Foods vs. Lohakit Metal Public | NSL Foods vs. Ingress Industrial 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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