Correlation Between Goodyear Public and Central Pattana
Can any of the company-specific risk be diversified away by investing in both Goodyear Public 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 Goodyear Public and Central Pattana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodyear Public and Central Pattana Public, you can compare the effects of market volatilities on Goodyear Public 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 Goodyear Public with a short position of Central Pattana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodyear Public and Central Pattana.
Diversification Opportunities for Goodyear Public and Central Pattana
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goodyear and Central is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear 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 Goodyear 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 Goodyear 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 Goodyear Public i.e., Goodyear Public and Central Pattana go up and down completely randomly.
Pair Corralation between Goodyear Public and Central Pattana
Assuming the 90 days trading horizon Goodyear Public is expected to generate 44.14 times more return on investment than Central Pattana. However, Goodyear Public is 44.14 times more volatile than Central Pattana Public. It trades about 0.06 of its potential returns per unit of risk. Central Pattana Public is currently generating about -0.01 per unit of risk. If you would invest 17,509 in Goodyear Public on September 3, 2024 and sell it today you would lose (509.00) from holding Goodyear Public or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodyear Public vs. Central Pattana Public
Performance |
| Timeline |
| Goodyear Public |
| Central Pattana Public |
Goodyear Public and Central Pattana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodyear Public and Central Pattana
The main advantage of trading using opposite Goodyear Public and Central Pattana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Public 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.| Goodyear Public vs. Central Pattana Public | Goodyear Public vs. CP ALL Public | Goodyear Public vs. Bangkok Dusit Medical | Goodyear Public vs. Airports of Thailand |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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