Correlation Between Cal Comp and Chonburi Concrete

Can any of the company-specific risk be diversified away by investing in both Cal Comp and Chonburi Concrete 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 Cal Comp and Chonburi Concrete into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cal Comp Electronics Public and Chonburi Concrete Product, you can compare the effects of market volatilities on Cal Comp and Chonburi Concrete 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 Cal Comp with a short position of Chonburi Concrete. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Comp and Chonburi Concrete.

Diversification Opportunities for Cal Comp and Chonburi Concrete

-0.77

Correlation Coefficient

Cal Comp  Chonburi Concrete

Pay attention - limited upside

The 3 months correlation between Cal and Chonburi is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cal Comp Electronics Public and Chonburi Concrete Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chonburi Concrete Product and Cal Comp 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 Cal Comp Electronics Public are associated (or correlated) with Chonburi Concrete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chonburi Concrete Product has no effect on the direction of Cal Comp i.e., Cal Comp and Chonburi Concrete go up and down completely randomly.

Pair Corralation between Cal Comp and Chonburi Concrete

Assuming the 90 days trading horizon Cal Comp Electronics Public is expected to generate 2.65 times more return on investment than Chonburi Concrete. However, Cal Comp is 2.65 times more volatile than Chonburi Concrete Product. It trades about 0.29 of its potential returns per unit of risk. Chonburi Concrete Product is currently generating about -0.04 per unit of risk. If you would invest  366.00  in Cal Comp Electronics Public on September 16, 2024 and sell it today you would earn a total of  589.00  from holding Cal Comp Electronics Public or generate 160.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cal Comp Electronics Public  vs.  Chonburi Concrete Product

Cal Comp Electronics

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Comp Electronics Public are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cal Comp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Chonburi Concrete Product

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chonburi Concrete Product has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Chonburi Concrete is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cal Comp and Chonburi Concrete

The main advantage of trading using opposite Cal Comp and Chonburi Concrete positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Comp position performs unexpectedly, Chonburi Concrete 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 Chonburi Concrete will offset losses from the drop in Chonburi Concrete's long position.

The idea behind Cal Comp Electronics Public and Chonburi Concrete Product pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.