Correlation Between Premier Marketing and Central Retail
Can any of the company-specific risk be diversified away by investing in both Premier Marketing 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 Premier Marketing and Central Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Marketing Public and Central Retail, you can compare the effects of market volatilities on Premier Marketing 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 Premier Marketing with a short position of Central Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Marketing and Central Retail.
Diversification Opportunities for Premier Marketing and Central Retail
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Premier and Central is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Premier Marketing Public and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail and Premier Marketing 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 Premier Marketing Public 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 has no effect on the direction of Premier Marketing i.e., Premier Marketing and Central Retail go up and down completely randomly.
Pair Corralation between Premier Marketing and Central Retail
Assuming the 90 days horizon Premier Marketing Public is expected to generate 0.7 times more return on investment than Central Retail. However, Premier Marketing Public is 1.42 times less risky than Central Retail. It trades about 0.03 of its potential returns per unit of risk. Central Retail is currently generating about -0.02 per unit of risk. If you would invest 836.00 in Premier Marketing Public on August 26, 2024 and sell it today you would earn a total of 109.00 from holding Premier Marketing Public or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Marketing Public vs. Central Retail
Performance |
| Timeline |
| Premier Marketing Public |
| Central Retail |
Premier Marketing and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Marketing and Central Retail
The main advantage of trading using opposite Premier Marketing and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Marketing 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.| Premier Marketing vs. CP ALL Public | Premier Marketing vs. Thai Union Group | Premier Marketing vs. Minor International Public | Premier Marketing vs. Central Pattana Public |
| Central Retail vs. The Erawan Group | Central Retail vs. Airports of Thailand | Central Retail vs. Eastern Technical Engineering | Central Retail vs. Pylon 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |