Correlation Between Haad Thip and CP ALL
Can any of the company-specific risk be diversified away by investing in both Haad Thip and CP ALL 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 Haad Thip and CP ALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haad Thip Public and CP ALL Public, you can compare the effects of market volatilities on Haad Thip and CP ALL 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 Haad Thip with a short position of CP ALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haad Thip and CP ALL.
Diversification Opportunities for Haad Thip and CP ALL
Poor diversification
The 3 months correlation between Haad and CPALL is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Haad Thip Public and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public and Haad Thip 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 Haad Thip Public are associated (or correlated) with CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of Haad Thip i.e., Haad Thip and CP ALL go up and down completely randomly.
Pair Corralation between Haad Thip and CP ALL
Assuming the 90 days trading horizon Haad Thip is expected to generate 1.5 times less return on investment than CP ALL. In addition to that, Haad Thip is 1.02 times more volatile than CP ALL Public. It trades about 0.04 of its total potential returns per unit of risk. CP ALL Public is currently generating about 0.06 per unit of volatility. If you would invest 5,234 in CP ALL Public on August 29, 2024 and sell it today you would earn a total of 991.00 from holding CP ALL Public or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haad Thip Public vs. CP ALL Public
Performance |
| Timeline |
| Haad Thip Public |
| CP ALL Public |
Haad Thip and CP ALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haad Thip and CP ALL
The main advantage of trading using opposite Haad Thip and CP ALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haad Thip position performs unexpectedly, CP ALL 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 CP ALL will offset losses from the drop in CP ALL's long position.| Haad Thip vs. Surapon Foods Public | Haad Thip vs. Tipco Foods Public | Haad Thip vs. Tropical Canning Public |
| CP ALL vs. Airports of Thailand | CP ALL vs. PTT Public | CP ALL vs. Bangkok Dusit Medical | CP ALL vs. Kasikornbank 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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