Correlation Between GFPT Public and Tipco Foods
Can any of the company-specific risk be diversified away by investing in both GFPT Public and Tipco 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 GFPT Public and Tipco Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GFPT Public and Tipco Foods Public, you can compare the effects of market volatilities on GFPT Public and Tipco 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 GFPT Public with a short position of Tipco Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of GFPT Public and Tipco Foods.
Diversification Opportunities for GFPT Public and Tipco Foods
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between GFPT and Tipco is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GFPT Public and Tipco Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tipco Foods Public and GFPT Public 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 GFPT Public are associated (or correlated) with Tipco Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tipco Foods Public has no effect on the direction of GFPT Public i.e., GFPT Public and Tipco Foods go up and down completely randomly.
Pair Corralation between GFPT Public and Tipco Foods
Assuming the 90 days trading horizon GFPT Public is expected to generate 185.62 times less return on investment than Tipco Foods. But when comparing it to its historical volatility, GFPT Public is 33.23 times less risky than Tipco Foods. It trades about 0.01 of its potential returns per unit of risk. Tipco Foods Public is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 864.00 in Tipco Foods Public on September 12, 2024 and sell it today you would earn a total of 156.00 from holding Tipco Foods Public or generate 18.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GFPT Public vs. Tipco Foods Public
Performance |
| Timeline |
| GFPT Public |
| Tipco Foods Public |
GFPT Public and Tipco Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GFPT Public and Tipco Foods
The main advantage of trading using opposite GFPT Public and Tipco Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GFPT Public position performs unexpectedly, Tipco 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 Tipco Foods will offset losses from the drop in Tipco Foods' long position.| GFPT Public vs. Charoen Pokphand Foods | GFPT Public vs. Hana Microelectronics Public | GFPT Public vs. AP Public | GFPT Public vs. Thai Vegetable Oil |
| Tipco Foods vs. GFPT Public | Tipco Foods vs. Dynasty Ceramic Public | Tipco Foods vs. Haad Thip Public | Tipco Foods vs. The Erawan Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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