Correlation Between Professional Waste and Com7 PCL
Can any of the company-specific risk be diversified away by investing in both Professional Waste and Com7 PCL 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 Professional Waste and Com7 PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Professional Waste Technology and Com7 PCL, you can compare the effects of market volatilities on Professional Waste and Com7 PCL 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 Professional Waste with a short position of Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Professional Waste and Com7 PCL.
Diversification Opportunities for Professional Waste and Com7 PCL
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Professional and Com7 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Professional Waste Technology and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL and Professional Waste 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 Professional Waste Technology are associated (or correlated) with Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of Professional Waste i.e., Professional Waste and Com7 PCL go up and down completely randomly.
Pair Corralation between Professional Waste and Com7 PCL
Assuming the 90 days trading horizon Professional Waste Technology is expected to under-perform the Com7 PCL. In addition to that, Professional Waste is 21.22 times more volatile than Com7 PCL. It trades about -0.11 of its total potential returns per unit of risk. Com7 PCL is currently generating about -0.29 per unit of volatility. If you would invest 2,700 in Com7 PCL on October 23, 2024 and sell it today you would lose (320.00) from holding Com7 PCL or give up 11.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 65.0% |
| Values | Daily Returns |
Professional Waste Technology vs. Com7 PCL
Performance |
| Timeline |
| Professional Waste |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Com7 PCL |
Professional Waste and Com7 PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Professional Waste and Com7 PCL
The main advantage of trading using opposite Professional Waste and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Professional Waste position performs unexpectedly, Com7 PCL 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 Com7 PCL will offset losses from the drop in Com7 PCL's long position.| Professional Waste vs. Interlink Communication Public | Professional Waste vs. Krung Thai Bank | Professional Waste vs. Syntec Construction Public | Professional Waste vs. The Navakij Insurance |
| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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