Correlation Between CPR Gomu and CMO Public
Can any of the company-specific risk be diversified away by investing in both CPR Gomu and CMO 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 CPR Gomu and CMO Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPR Gomu Industrial and CMO Public, you can compare the effects of market volatilities on CPR Gomu and CMO 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 CPR Gomu with a short position of CMO Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and CMO Public.
Diversification Opportunities for CPR Gomu and CMO Public
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CPR and CMO is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial and CMO Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMO Public and CPR Gomu 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 CPR Gomu Industrial are associated (or correlated) with CMO Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMO Public has no effect on the direction of CPR Gomu i.e., CPR Gomu and CMO Public go up and down completely randomly.
Pair Corralation between CPR Gomu and CMO Public
Assuming the 90 days trading horizon CPR Gomu Industrial is expected to under-perform the CMO Public. But the stock apears to be less risky and, when comparing its historical volatility, CPR Gomu Industrial is 1.51 times less risky than CMO Public. The stock trades about -0.25 of its potential returns per unit of risk. The CMO Public is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 83.00 in CMO Public on December 2, 2024 and sell it today you would lose (14.00) from holding CMO Public or give up 16.87% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
CPR Gomu Industrial vs. CMO Public
Performance |
Timeline |
CPR Gomu Industrial |
CMO Public |
CPR Gomu and CMO Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CPR Gomu and CMO Public
The main advantage of trading using opposite CPR Gomu and CMO Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu position performs unexpectedly, CMO 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 CMO Public will offset losses from the drop in CMO Public's long position.CPR Gomu vs. Salee Colour Public | CPR Gomu vs. Business Online PCL | CPR Gomu vs. Communication System Solution | CPR Gomu vs. CI Group Public |
CMO Public vs. CI Group Public | CMO Public vs. CPR Gomu Industrial | CMO Public vs. Cho Thavee Public | CMO Public vs. Communication System Solution |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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