Correlation Between Com7 PCL and PINTHONG INDUSTRIAL

Can any of the company-specific risk be diversified away by investing in both Com7 PCL and PINTHONG INDUSTRIAL 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 PINTHONG INDUSTRIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Com7 PCL and PINTHONG INDUSTRIAL PARK, you can compare the effects of market volatilities on Com7 PCL and PINTHONG INDUSTRIAL 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 PINTHONG INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Com7 PCL and PINTHONG INDUSTRIAL.

Diversification Opportunities for Com7 PCL and PINTHONG INDUSTRIAL

0.35

Correlation Coefficient

Com7 PCL  PINTHONG INDUSTRIAL

Weak diversification

The 3 months correlation between Com7 and PINTHONG is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Com7 PCL and PINTHONG INDUSTRIAL PARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PINTHONG INDUSTRIAL PARK 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 PINTHONG INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PINTHONG INDUSTRIAL PARK has no effect on the direction of Com7 PCL i.e., Com7 PCL and PINTHONG INDUSTRIAL go up and down completely randomly.

Pair Corralation between Com7 PCL and PINTHONG INDUSTRIAL

Assuming the 90 days trading horizon Com7 PCL is expected to generate 3.26 times less return on investment than PINTHONG INDUSTRIAL. But when comparing it to its historical volatility, Com7 PCL is 1.54 times less risky than PINTHONG INDUSTRIAL. It trades about 0.06 of its potential returns per unit of risk. PINTHONG INDUSTRIAL PARK is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  515.00  in PINTHONG INDUSTRIAL PARK on September 12, 2024 and sell it today you would earn a total of  135.00  from holding PINTHONG INDUSTRIAL PARK or generate 26.21% return on investment over 90 days.

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

Com7 PCL  vs.  PINTHONG INDUSTRIAL PARK

Com7 PCL

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Com7 PCL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Com7 PCL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PINTHONG INDUSTRIAL PARK

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PINTHONG INDUSTRIAL PARK are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, PINTHONG INDUSTRIAL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Com7 PCL and PINTHONG INDUSTRIAL

The main advantage of trading using opposite Com7 PCL and PINTHONG INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Com7 PCL position performs unexpectedly, PINTHONG INDUSTRIAL 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 PINTHONG INDUSTRIAL will offset losses from the drop in PINTHONG INDUSTRIAL's long position.

The idea behind Com7 PCL and PINTHONG INDUSTRIAL PARK 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.