Correlation Between Thanachart Capital and CPR Gomu
Can any of the company-specific risk be diversified away by investing in both Thanachart Capital 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 Thanachart Capital and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanachart Capital Public and CPR Gomu Industrial, you can compare the effects of market volatilities on Thanachart Capital 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 Thanachart Capital with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanachart Capital and CPR Gomu.
Diversification Opportunities for Thanachart Capital and CPR Gomu
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thanachart and CPR is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Thanachart Capital Public 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 Thanachart Capital 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 Thanachart Capital Public 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 Thanachart Capital i.e., Thanachart Capital and CPR Gomu go up and down completely randomly.
Pair Corralation between Thanachart Capital and CPR Gomu
Assuming the 90 days trading horizon Thanachart Capital Public is expected to generate 0.35 times more return on investment than CPR Gomu. However, Thanachart Capital Public is 2.88 times less risky than CPR Gomu. It trades about 0.06 of its potential returns per unit of risk. CPR Gomu Industrial is currently generating about 0.01 per unit of risk. If you would invest 3,750 in Thanachart Capital Public on September 5, 2024 and sell it today you would earn a total of 1,250 from holding Thanachart Capital Public or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Thanachart Capital Public vs. CPR Gomu Industrial
Performance |
| Timeline |
| Thanachart Capital Public |
| CPR Gomu Industrial |
Thanachart Capital and CPR Gomu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanachart Capital and CPR Gomu
The main advantage of trading using opposite Thanachart Capital and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanachart Capital 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.| Thanachart Capital vs. Thai Steel Cable | Thanachart Capital vs. Tropical Canning Public | Thanachart Capital vs. RB Food Supply | Thanachart Capital vs. Eureka Design Public |
| CPR Gomu vs. Thanachart Capital Public | CPR Gomu vs. T S Flour | CPR Gomu vs. Ubis Public | CPR Gomu vs. Thai Vegetable Oil |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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