Correlation Between SCG PACKAGING and CK Power
Can any of the company-specific risk be diversified away by investing in both SCG PACKAGING and CK Power 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 SCG PACKAGING and CK Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCG PACKAGING PCL NVDR and CK Power Public, you can compare the effects of market volatilities on SCG PACKAGING and CK Power 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 SCG PACKAGING with a short position of CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCG PACKAGING and CK Power.
Diversification Opportunities for SCG PACKAGING and CK Power
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCG and CKP is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SCG PACKAGING PCL NVDR and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power Public and SCG PACKAGING 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 SCG PACKAGING PCL NVDR are associated (or correlated) with CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of SCG PACKAGING i.e., SCG PACKAGING and CK Power go up and down completely randomly.
Pair Corralation between SCG PACKAGING and CK Power
Assuming the 90 days trading horizon SCG PACKAGING PCL NVDR is expected to under-perform the CK Power. In addition to that, SCG PACKAGING is 4.79 times more volatile than CK Power Public. It trades about -0.26 of its total potential returns per unit of risk. CK Power Public is currently generating about -0.28 per unit of volatility. If you would invest 366.00 in CK Power Public on September 1, 2024 and sell it today you would lose (38.00) from holding CK Power Public or give up 10.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCG PACKAGING PCL NVDR vs. CK Power Public
Performance |
| Timeline |
| SCG PACKAGING PCL |
| CK Power Public |
SCG PACKAGING and CK Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCG PACKAGING and CK Power
The main advantage of trading using opposite SCG PACKAGING and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCG PACKAGING position performs unexpectedly, CK Power 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 CK Power will offset losses from the drop in CK Power's long position.| SCG PACKAGING vs. PTT Public | SCG PACKAGING vs. Kasikornbank Public | SCG PACKAGING vs. The Siam Cement | SCG PACKAGING vs. OSOTSPA PCL NVDR |
| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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