Correlation Between Mena Transport and CPR Gomu
Can any of the company-specific risk be diversified away by investing in both Mena Transport and CPR Gomu 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 Mena Transport and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mena Transport Public and CPR Gomu Industrial, you can compare the effects of market volatilities on Mena Transport and CPR Gomu 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 Mena Transport with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and CPR Gomu.
Diversification Opportunities for Mena Transport and CPR Gomu
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mena and CPR is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and CPR Gomu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPR Gomu Industrial and Mena Transport 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 Mena Transport Public are associated (or correlated) with CPR Gomu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPR Gomu Industrial has no effect on the direction of Mena Transport i.e., Mena Transport and CPR Gomu go up and down completely randomly.
Pair Corralation between Mena Transport and CPR Gomu
Assuming the 90 days trading horizon Mena Transport is expected to generate 36.37 times less return on investment than CPR Gomu. But when comparing it to its historical volatility, Mena Transport Public is 1.72 times less risky than CPR Gomu. It trades about 0.01 of its potential returns per unit of risk. CPR Gomu Industrial is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 299.00 in CPR Gomu Industrial on August 31, 2024 and sell it today you would earn a total of 65.00 from holding CPR Gomu Industrial or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mena Transport Public vs. CPR Gomu Industrial
Performance |
| Timeline |
| Mena Transport Public |
| CPR Gomu Industrial |
Mena Transport and CPR Gomu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mena Transport and CPR Gomu
The main advantage of trading using opposite Mena Transport and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, CPR Gomu 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 CPR Gomu will offset losses from the drop in CPR Gomu's long position.| Mena Transport vs. Hwa Fong Rubber | Mena Transport vs. Karmarts Public | Mena Transport vs. Jay Mart Public | Mena Transport vs. IRPC Public |
| CPR Gomu vs. Moong Pattana International | CPR Gomu vs. Prodigy Public | CPR Gomu vs. Thai Ha Public | CPR Gomu vs. Kingsmen CMTI 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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