Correlation Between CENTRAL RETAIL and 2S Metal
Can any of the company-specific risk be diversified away by investing in both CENTRAL RETAIL and 2S Metal 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 CENTRAL RETAIL and 2S Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENTRAL RETAIL P and 2S Metal Public, you can compare the effects of market volatilities on CENTRAL RETAIL and 2S Metal 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 CENTRAL RETAIL with a short position of 2S Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTRAL RETAIL and 2S Metal.
Diversification Opportunities for CENTRAL RETAIL and 2S Metal
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CENTRAL and 2S Metal is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CENTRAL RETAIL P and 2S Metal Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2S Metal Public and CENTRAL RETAIL 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 CENTRAL RETAIL P are associated (or correlated) with 2S Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2S Metal Public has no effect on the direction of CENTRAL RETAIL i.e., CENTRAL RETAIL and 2S Metal go up and down completely randomly.
Pair Corralation between CENTRAL RETAIL and 2S Metal
Assuming the 90 days trading horizon CENTRAL RETAIL P is expected to under-perform the 2S Metal. In addition to that, CENTRAL RETAIL is 1.73 times more volatile than 2S Metal Public. It trades about -0.21 of its total potential returns per unit of risk. 2S Metal Public is currently generating about -0.18 per unit of volatility. If you would invest 292.00 in 2S Metal Public on September 5, 2024 and sell it today you would lose (18.00) from holding 2S Metal Public or give up 6.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTRAL RETAIL P vs. 2S Metal Public
Performance |
| Timeline |
| CENTRAL RETAIL P |
| 2S Metal Public |
CENTRAL RETAIL and 2S Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTRAL RETAIL and 2S Metal
The main advantage of trading using opposite CENTRAL RETAIL and 2S Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTRAL RETAIL position performs unexpectedly, 2S Metal 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 2S Metal will offset losses from the drop in 2S Metal's long position.| CENTRAL RETAIL vs. 2S Metal Public | CENTRAL RETAIL vs. Thai Energy Storage | CENTRAL RETAIL vs. NSL Foods Public | CENTRAL RETAIL vs. President Automobile Industries |
| 2S Metal vs. Diamond Building Products | 2S Metal vs. MCS Steel Public | 2S Metal vs. Asia Green Energy | 2S Metal vs. Hwa Fong Rubber |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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