Correlation Between Crown Seal and CPL Group
Can any of the company-specific risk be diversified away by investing in both Crown Seal and CPL Group 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 Crown Seal and CPL Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Seal Public and CPL Group Public, you can compare the effects of market volatilities on Crown Seal and CPL Group 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 Crown Seal with a short position of CPL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Seal and CPL Group.
Diversification Opportunities for Crown Seal and CPL Group
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crown and CPL is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Crown Seal Public and CPL Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPL Group Public and Crown Seal 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 Crown Seal Public are associated (or correlated) with CPL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPL Group Public has no effect on the direction of Crown Seal i.e., Crown Seal and CPL Group go up and down completely randomly.
Pair Corralation between Crown Seal and CPL Group
Assuming the 90 days trading horizon Crown Seal Public is expected to generate 0.57 times more return on investment than CPL Group. However, Crown Seal Public is 1.74 times less risky than CPL Group. It trades about 0.03 of its potential returns per unit of risk. CPL Group Public is currently generating about -0.44 per unit of risk. If you would invest 4,575 in Crown Seal Public on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Crown Seal Public or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Seal Public vs. CPL Group Public
Performance |
| Timeline |
| Crown Seal Public |
| CPL Group Public |
Crown Seal and CPL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Seal and CPL Group
The main advantage of trading using opposite Crown Seal and CPL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Seal position performs unexpectedly, CPL Group 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 CPL Group will offset losses from the drop in CPL Group's long position.| Crown Seal vs. AAPICO Hitech Public | Crown Seal vs. AP Public | Crown Seal vs. Aikchol Hospital Public | Crown Seal vs. Bank of Ayudhya |
| CPL Group vs. Castle Peak Holdings | CPL Group vs. Chumporn Palm Oil | CPL Group vs. Boutique Newcity Public | CPL Group vs. Crown Seal 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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