Correlation Between Thai Vegetable and CPR Gomu
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable 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 Thai Vegetable and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Vegetable Oil and CPR Gomu Industrial, you can compare the effects of market volatilities on Thai Vegetable 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 Thai Vegetable with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and CPR Gomu.
Diversification Opportunities for Thai Vegetable and CPR Gomu
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Thai and CPR is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil 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 Thai Vegetable 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 Vegetable Oil 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 Thai Vegetable i.e., Thai Vegetable and CPR Gomu go up and down completely randomly.
Pair Corralation between Thai Vegetable and CPR Gomu
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to under-perform the CPR Gomu. But the stock apears to be less risky and, when comparing its historical volatility, Thai Vegetable Oil is 4.93 times less risky than CPR Gomu. The stock trades about -0.27 of its potential returns per unit of risk. The CPR Gomu Industrial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 292.00 in CPR Gomu Industrial on September 12, 2024 and sell it today you would earn a total of 54.00 from holding CPR Gomu Industrial or generate 18.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thai Vegetable Oil vs. CPR Gomu Industrial
Performance |
| Timeline |
| Thai Vegetable Oil |
| CPR Gomu Industrial |
Thai Vegetable and CPR Gomu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and CPR Gomu
The main advantage of trading using opposite Thai Vegetable and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable 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.| Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. TISCO Financial Group | Thai Vegetable vs. Thanachart Capital Public |
| CPR Gomu vs. Thoresen Thai Agencies | CPR Gomu vs. Sri Trang Agro Industry | CPR Gomu vs. TPI Polene Public | CPR Gomu vs. Ratchthani Leasing 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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