Correlation Between CPR Gomu and WHA Industrial
Can any of the company-specific risk be diversified away by investing in both CPR Gomu and WHA Industrial 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 WHA Industrial 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 WHA Industrial Leasehold, you can compare the effects of market volatilities on CPR Gomu and WHA Industrial 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 WHA Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and WHA Industrial.
Diversification Opportunities for CPR Gomu and WHA Industrial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CPR and WHA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial and WHA Industrial Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHA Industrial Leasehold 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 WHA Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHA Industrial Leasehold has no effect on the direction of CPR Gomu i.e., CPR Gomu and WHA Industrial go up and down completely randomly.
Pair Corralation between CPR Gomu and WHA Industrial
Assuming the 90 days trading horizon CPR Gomu is expected to generate 2.22 times less return on investment than WHA Industrial. In addition to that, CPR Gomu is 2.63 times more volatile than WHA Industrial Leasehold. It trades about 0.03 of its total potential returns per unit of risk. WHA Industrial Leasehold is currently generating about 0.16 per unit of volatility. If you would invest 532.00 in WHA Industrial Leasehold on September 19, 2024 and sell it today you would earn a total of 123.00 from holding WHA Industrial Leasehold or generate 23.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPR Gomu Industrial vs. WHA Industrial Leasehold
Performance |
| Timeline |
| CPR Gomu Industrial |
| WHA Industrial Leasehold |
CPR Gomu and WHA Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPR Gomu and WHA Industrial
The main advantage of trading using opposite CPR Gomu and WHA Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu position performs unexpectedly, WHA Industrial 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 WHA Industrial will offset losses from the drop in WHA Industrial's 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 |
| WHA Industrial vs. Quality Houses Property | WHA Industrial vs. The Erawan Group | WHA Industrial vs. Jay Mart Public | WHA Industrial 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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