Correlation Between CPR Gomu and PINTHONG INDUSTRIAL

Can any of the company-specific risk be diversified away by investing in both CPR Gomu 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 CPR Gomu and PINTHONG INDUSTRIAL 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 PINTHONG INDUSTRIAL PARK, you can compare the effects of market volatilities on CPR Gomu 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 CPR Gomu with a short position of PINTHONG INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPR Gomu and PINTHONG INDUSTRIAL.

Diversification Opportunities for CPR Gomu and PINTHONG INDUSTRIAL

0.17

Correlation Coefficient

CPR Gomu  PINTHONG INDUSTRIAL

Average diversification

The 3 months correlation between CPR and PINTHONG is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CPR Gomu Industrial 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 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 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 CPR Gomu i.e., CPR Gomu and PINTHONG INDUSTRIAL go up and down completely randomly.

Pair Corralation between CPR Gomu and PINTHONG INDUSTRIAL

Assuming the 90 days trading horizon CPR Gomu is expected to generate 1.19 times less return on investment than PINTHONG INDUSTRIAL. In addition to that, CPR Gomu is 1.03 times more volatile than PINTHONG INDUSTRIAL PARK. It trades about 0.11 of its total potential returns per unit of risk. PINTHONG INDUSTRIAL PARK is currently generating about 0.14 per unit of volatility. If you would invest  474.00  in PINTHONG INDUSTRIAL PARK on September 1, 2024 and sell it today you would earn a total of  156.00  from holding PINTHONG INDUSTRIAL PARK or generate 32.91% return on investment over 90 days.

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

CPR Gomu Industrial  vs.  PINTHONG INDUSTRIAL PARK

CPR Gomu Industrial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CPR Gomu Industrial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, CPR Gomu disclosed solid returns over the last few months and may actually be approaching a breakup point.

PINTHONG INDUSTRIAL PARK

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PINTHONG INDUSTRIAL PARK are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, PINTHONG INDUSTRIAL disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CPR Gomu and PINTHONG INDUSTRIAL

The main advantage of trading using opposite CPR Gomu and PINTHONG INDUSTRIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPR Gomu 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 CPR Gomu Industrial 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.