Correlation Between Central Pattana and True Public

Can any of the company-specific risk be diversified away by investing in both Central Pattana and True Public 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 Central Pattana and True Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Central Pattana Public and True Public, you can compare the effects of market volatilities on Central Pattana and True Public 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 Central Pattana with a short position of True Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pattana and True Public.

Diversification Opportunities for Central Pattana and True Public

-0.23

Correlation Coefficient

Central Pattana  True Public

Very good diversification

The 3 months correlation between Central and True is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Central Pattana Public and True Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on True Public and Central Pattana 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 Central Pattana Public are associated (or correlated) with True Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of True Public has no effect on the direction of Central Pattana i.e., Central Pattana and True Public go up and down completely randomly.

Pair Corralation between Central Pattana and True Public

Assuming the 90 days trading horizon Central Pattana Public is expected to generate 13.6 times more return on investment than True Public. However, Central Pattana is 13.6 times more volatile than True Public. It trades about 0.11 of its potential returns per unit of risk. True Public is currently generating about 0.12 per unit of risk. If you would invest  6,575  in Central Pattana Public on October 15, 2024 and sell it today you would lose (1,250) from holding Central Pattana Public or give up 19.01% of portfolio value over 90 days.

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

Central Pattana Public  vs.  True Public

Central Pattana Public

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Central Pattana Public are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Central Pattana sustained solid returns over the last few months and may actually be approaching a breakup point.

True Public

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Central Pattana and True Public

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

The idea behind Central Pattana Public and True Public 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.