Correlation Between Thai Rubber and CK Power
Can any of the company-specific risk be diversified away by investing in both Thai Rubber 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 Thai Rubber and CK Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Rubber Latex and CK Power Public, you can compare the effects of market volatilities on Thai Rubber 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 Thai Rubber with a short position of CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Rubber and CK Power.
Diversification Opportunities for Thai Rubber and CK Power
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thai and CKP-R is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Thai Rubber Latex 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 Thai Rubber 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 Thai Rubber Latex 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 Thai Rubber i.e., Thai Rubber and CK Power go up and down completely randomly.
Pair Corralation between Thai Rubber and CK Power
Assuming the 90 days trading horizon Thai Rubber Latex is expected to under-perform the CK Power. In addition to that, Thai Rubber is 1.61 times more volatile than CK Power Public. It trades about -0.04 of its total potential returns per unit of risk. CK Power Public is currently generating about 0.0 per unit of volatility. If you would invest 352.00 in CK Power Public on September 3, 2024 and sell it today you would lose (20.00) from holding CK Power Public or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Rubber Latex vs. CK Power Public
Performance |
| Timeline |
| Thai Rubber Latex |
| CK Power Public |
Thai Rubber and CK Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Rubber and CK Power
The main advantage of trading using opposite Thai Rubber and CK Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Rubber 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.| Thai Rubber vs. Thoresen Thai Agencies | Thai Rubber vs. Sri Trang Agro Industry | Thai Rubber vs. TPI Polene Public | Thai Rubber vs. Ratchthani Leasing Public |
| CK Power vs. TPI Polene Power | CK Power vs. SPCG Public | CK Power vs. CK Power Public | CK Power vs. The Erawan Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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