Correlation Between CIMB Thai and ALL ENERGY

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

By analyzing existing cross correlation between CIMB Thai Bank and ALL ENERGY UTILITIES, you can compare the effects of market volatilities on CIMB Thai and ALL 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 CIMB Thai with a short position of ALL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and ALL ENERGY.

Diversification Opportunities for CIMB Thai and ALL ENERGY

-0.92

Correlation Coefficient

CIMB Thai  ALL ENERGY

Pay attention - limited upside

The 3 months correlation between CIMB and ALL is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and ALL ENERGY UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALL ENERGY UTILITIES and CIMB Thai 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 CIMB Thai Bank are associated (or correlated) with ALL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALL ENERGY UTILITIES has no effect on the direction of CIMB Thai i.e., CIMB Thai and ALL ENERGY go up and down completely randomly.

Pair Corralation between CIMB Thai and ALL ENERGY

Assuming the 90 days trading horizon CIMB Thai Bank is expected to generate 0.39 times more return on investment than ALL ENERGY. However, CIMB Thai Bank is 2.59 times less risky than ALL ENERGY. It trades about 0.35 of its potential returns per unit of risk. ALL ENERGY UTILITIES is currently generating about -0.16 per unit of risk. If you would invest  45.00  in CIMB Thai Bank on December 19, 2024 and sell it today you would earn a total of  29.00  from holding CIMB Thai Bank or generate 64.44% return on investment over 90 days.

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

CIMB Thai Bank  vs.  ALL ENERGY UTILITIES

CIMB Thai Bank

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CIMB Thai Bank are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, CIMB Thai sustained solid returns over the last few months and may actually be approaching a breakup point.

ALL ENERGY UTILITIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALL ENERGY UTILITIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with CIMB Thai and ALL ENERGY

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

The idea behind CIMB Thai Bank and ALL ENERGY UTILITIES 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.