Correlation Between SPCG Public and CK Power
Can any of the company-specific risk be diversified away by investing in both SPCG Public 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 SPCG Public and CK Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPCG Public and CK Power Public, you can compare the effects of market volatilities on SPCG Public 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 SPCG Public with a short position of CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPCG Public and CK Power.
Diversification Opportunities for SPCG Public and CK Power
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPCG and CKP is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SPCG Public 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 SPCG Public 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 SPCG Public 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 SPCG Public i.e., SPCG Public and CK Power go up and down completely randomly.
Pair Corralation between SPCG Public and CK Power
Assuming the 90 days trading horizon SPCG Public is expected to under-perform the CK Power. But the stock apears to be less risky and, when comparing its historical volatility, SPCG Public is 1.16 times less risky than CK Power. The stock trades about -0.08 of its potential returns per unit of risk. The CK Power Public is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 376.00 in CK Power Public on September 1, 2024 and sell it today you would lose (48.00) from holding CK Power Public or give up 12.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.45% |
| Values | Daily Returns |
SPCG Public vs. CK Power Public
Performance |
| Timeline |
| SPCG Public |
| CK Power Public |
SPCG Public and CK Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPCG Public and CK Power
The main advantage of trading using opposite SPCG Public and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPCG Public 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.| SPCG Public vs. BCPG Public | SPCG Public vs. TPI Polene Power | SPCG Public vs. BTS Group Holdings | SPCG Public vs. Energy Absolute Public |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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