Correlation Between Neo Corporate and CENTRAL RETAIL
Can any of the company-specific risk be diversified away by investing in both Neo Corporate and CENTRAL RETAIL 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 Neo Corporate and CENTRAL RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Corporate Pcl and CENTRAL RETAIL P, you can compare the effects of market volatilities on Neo Corporate and CENTRAL RETAIL 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 Neo Corporate with a short position of CENTRAL RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Corporate and CENTRAL RETAIL.
Diversification Opportunities for Neo Corporate and CENTRAL RETAIL
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Neo and CENTRAL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Neo Corporate Pcl and CENTRAL RETAIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRAL RETAIL P and Neo Corporate 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 Neo Corporate Pcl are associated (or correlated) with CENTRAL RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRAL RETAIL P has no effect on the direction of Neo Corporate i.e., Neo Corporate and CENTRAL RETAIL go up and down completely randomly.
Pair Corralation between Neo Corporate and CENTRAL RETAIL
Assuming the 90 days trading horizon Neo Corporate Pcl is expected to generate 83.45 times more return on investment than CENTRAL RETAIL. However, Neo Corporate is 83.45 times more volatile than CENTRAL RETAIL P. It trades about 0.18 of its potential returns per unit of risk. CENTRAL RETAIL P is currently generating about -0.21 per unit of risk. If you would invest 3,975 in Neo Corporate Pcl on September 5, 2024 and sell it today you would lose (475.00) from holding Neo Corporate Pcl or give up 11.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neo Corporate Pcl vs. CENTRAL RETAIL P
Performance |
| Timeline |
| Neo Corporate Pcl |
| CENTRAL RETAIL P |
Neo Corporate and CENTRAL RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Corporate and CENTRAL RETAIL
The main advantage of trading using opposite Neo Corporate and CENTRAL RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Corporate position performs unexpectedly, CENTRAL RETAIL 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 RETAIL will offset losses from the drop in CENTRAL RETAIL's long position.| Neo Corporate vs. CENTRAL RETAIL P | Neo Corporate vs. 3BB INTERNET INFRASTRUCTURE | Neo Corporate vs. Asia Medical Agricultural | Neo Corporate vs. Winnergy Medical Public |
| CENTRAL RETAIL vs. 2S Metal Public | CENTRAL RETAIL vs. Thai Energy Storage | CENTRAL RETAIL vs. NSL Foods Public | CENTRAL RETAIL vs. President Automobile Industries |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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