Correlation Between Dcon Products and Central Pattana
Can any of the company-specific risk be diversified away by investing in both Dcon Products and Central Pattana 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 Dcon Products and Central Pattana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dcon Products Public and Central Pattana Public, you can compare the effects of market volatilities on Dcon Products and Central Pattana 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 Dcon Products with a short position of Central Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dcon Products and Central Pattana.
Diversification Opportunities for Dcon Products and Central Pattana
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dcon and Central is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dcon Products Public and Central Pattana Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pattana Public and Dcon Products 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 Dcon Products Public are associated (or correlated) with Central Pattana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pattana Public has no effect on the direction of Dcon Products i.e., Dcon Products and Central Pattana go up and down completely randomly.
Pair Corralation between Dcon Products and Central Pattana
Assuming the 90 days trading horizon Dcon Products Public is expected to generate 53.84 times more return on investment than Central Pattana. However, Dcon Products is 53.84 times more volatile than Central Pattana Public. It trades about 0.08 of its potential returns per unit of risk. Central Pattana Public is currently generating about 0.02 per unit of risk. If you would invest 38.00 in Dcon Products Public on September 1, 2024 and sell it today you would lose (8.00) from holding Dcon Products Public or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dcon Products Public vs. Central Pattana Public
Performance |
| Timeline |
| Dcon Products Public |
| Central Pattana Public |
Dcon Products and Central Pattana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dcon Products and Central Pattana
The main advantage of trading using opposite Dcon Products and Central Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dcon Products position performs unexpectedly, Central Pattana 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 Central Pattana will offset losses from the drop in Central Pattana's long position.| Dcon Products vs. AAPICO Hitech Public | Dcon Products vs. AP Public | Dcon Products vs. Aikchol Hospital Public | Dcon Products vs. Bank of Ayudhya |
| Central Pattana vs. CP ALL Public | Central Pattana vs. Bangkok Dusit Medical | Central Pattana vs. Airports of Thailand | Central Pattana vs. Advanced Info Service |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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