Correlation Between Ratchthani Leasing and CPR Gomu

Can any of the company-specific risk be diversified away by investing in both Ratchthani Leasing and CPR Gomu 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 Ratchthani Leasing and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Ratchthani Leasing and CPR Gomu

-0.23

Correlation Coefficient

Ratchthani Leasing  CPR Gomu

Very good diversification

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

Pair Corralation between Ratchthani Leasing and CPR Gomu

Assuming the 90 days trading horizon Ratchthani Leasing Public is expected to under-perform the CPR Gomu. But the stock apears to be less risky and, when comparing its historical volatility, Ratchthani Leasing Public is 1.22 times less risky than CPR Gomu. The stock trades about -0.34 of its potential returns per unit of risk. The CPR Gomu Industrial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  284.00  in CPR Gomu Industrial on October 21, 2024 and sell it today you would earn a total of  10.00  from holding CPR Gomu Industrial or generate 3.52% return on investment over 90 days.

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

Ratchthani Leasing Public  vs.  CPR Gomu Industrial

Ratchthani Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ratchthani Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CPR Gomu Industrial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CPR Gomu Industrial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, CPR Gomu is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ratchthani Leasing and CPR Gomu

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

The idea behind Ratchthani Leasing Public and CPR Gomu Industrial 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.