Correlation Between Tanachira Retail and CPR Gomu
Can any of the company-specific risk be diversified away by investing in both Tanachira Retail and CPR Gomu 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 Tanachira Retail and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tanachira Retail and CPR Gomu Industrial, you can compare the effects of market volatilities on Tanachira Retail and CPR Gomu 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 Tanachira Retail with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tanachira Retail and CPR Gomu.
Diversification Opportunities for Tanachira Retail and CPR Gomu
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tanachira and CPR is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tanachira Retail and CPR Gomu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPR Gomu Industrial and Tanachira Retail 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 Tanachira Retail are associated (or correlated) with CPR Gomu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPR Gomu Industrial has no effect on the direction of Tanachira Retail i.e., Tanachira Retail and CPR Gomu go up and down completely randomly.
Pair Corralation between Tanachira Retail and CPR Gomu
Assuming the 90 days trading horizon Tanachira Retail is expected to under-perform the CPR Gomu. But the stock apears to be less risky and, when comparing its historical volatility, Tanachira Retail is 1.05 times less risky than CPR Gomu. The stock trades about -0.11 of its potential returns per unit of risk. The CPR Gomu Industrial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 289.00 in CPR Gomu Industrial on September 13, 2024 and sell it today you would earn a total of 55.00 from holding CPR Gomu Industrial or generate 19.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tanachira Retail vs. CPR Gomu Industrial
Performance |
| Timeline |
| Tanachira Retail |
| CPR Gomu Industrial |
Tanachira Retail and CPR Gomu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tanachira Retail and CPR Gomu
The main advantage of trading using opposite Tanachira Retail and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tanachira Retail position performs unexpectedly, CPR Gomu 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 CPR Gomu will offset losses from the drop in CPR Gomu's long position.| Tanachira Retail vs. Delta Electronics Public | Tanachira Retail vs. Delta Electronics Public | Tanachira Retail vs. Airports of Thailand | Tanachira Retail vs. Airports of Thailand |
| CPR Gomu vs. Salee Colour Public | CPR Gomu vs. Business Online PCL | CPR Gomu vs. Communication System Solution | CPR Gomu vs. CI Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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