Correlation Between Com7 PCL and Thai President
Can any of the company-specific risk be diversified away by investing in both Com7 PCL and Thai President 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 Com7 PCL and Thai President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Com7 PCL and Thai President Foods, you can compare the effects of market volatilities on Com7 PCL and Thai President 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 Com7 PCL with a short position of Thai President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and Thai President.
Diversification Opportunities for Com7 PCL and Thai President
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Com7 and Thai is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and Thai President Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai President Foods and Com7 PCL 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 Com7 PCL are associated (or correlated) with Thai President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai President Foods has no effect on the direction of Com7 PCL i.e., Com7 PCL and Thai President go up and down completely randomly.
Pair Corralation between Com7 PCL and Thai President
Assuming the 90 days trading horizon Com7 PCL is expected to generate 6.02 times more return on investment than Thai President. However, Com7 PCL is 6.02 times more volatile than Thai President Foods. It trades about 0.09 of its potential returns per unit of risk. Thai President Foods is currently generating about -0.11 per unit of risk. If you would invest 2,390 in Com7 PCL on September 25, 2024 and sell it today you would earn a total of 310.00 from holding Com7 PCL or generate 12.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Com7 PCL vs. Thai President Foods
Performance |
Timeline |
Com7 PCL |
Thai President Foods |
Com7 PCL and Thai President Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Com7 PCL and Thai President
The main advantage of trading using opposite Com7 PCL and Thai President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, Thai President 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 Thai President will offset losses from the drop in Thai President's long position.Com7 PCL vs. CP ALL Public | Com7 PCL vs. Bangkok Dusit Medical | Com7 PCL vs. Airports of Thailand | Com7 PCL vs. Kasikornbank Public |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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