Correlation Between Cpt Drives and Thai Energy

Can any of the company-specific risk be diversified away by investing in both Cpt Drives and Thai Energy 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 Cpt Drives and Thai Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cpt Drives Power and Thai Energy Storage, you can compare the effects of market volatilities on Cpt Drives and Thai Energy 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 Cpt Drives with a short position of Thai Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cpt Drives and Thai Energy.

Diversification Opportunities for Cpt Drives and Thai Energy

0.7

Correlation Coefficient

Cpt Drives  Thai Energy

Poor diversification

The 3 months correlation between Cpt and Thai is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cpt Drives Power and Thai Energy Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Energy Storage and Cpt Drives 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 Cpt Drives Power are associated (or correlated) with Thai Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Energy Storage has no effect on the direction of Cpt Drives i.e., Cpt Drives and Thai Energy go up and down completely randomly.

Pair Corralation between Cpt Drives and Thai Energy

Assuming the 90 days trading horizon Cpt Drives Power is expected to generate 9.47 times more return on investment than Thai Energy. However, Cpt Drives is 9.47 times more volatile than Thai Energy Storage. It trades about 0.18 of its potential returns per unit of risk. Thai Energy Storage is currently generating about 0.0 per unit of risk. If you would invest  73.00  in Cpt Drives Power on September 14, 2024 and sell it today you would earn a total of  26.00  from holding Cpt Drives Power or generate 35.62% return on investment over 90 days.

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

Cpt Drives Power  vs.  Thai Energy Storage

Cpt Drives Power

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cpt Drives Power are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Cpt Drives disclosed solid returns over the last few months and may actually be approaching a breakup point.

Thai Energy Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Energy Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Thai Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cpt Drives and Thai Energy

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

The idea behind Cpt Drives Power and Thai Energy Storage 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.