Correlation Between Thai Union and CP ALL

Can any of the company-specific risk be diversified away by investing in both Thai Union and CP ALL 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 Thai Union and CP ALL into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Thai Union and CP ALL

0.88

Correlation Coefficient

Thai Union  CP ALL

Very poor diversification

The 3 months correlation between Thai and CPALL is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group and CP ALL Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP ALL Public and Thai Union 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 Thai Union Group are associated (or correlated) with CP ALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP ALL Public has no effect on the direction of Thai Union i.e., Thai Union and CP ALL go up and down completely randomly.

Pair Corralation between Thai Union and CP ALL

Assuming the 90 days horizon Thai Union Group is expected to under-perform the CP ALL. But the stock apears to be less risky and, when comparing its historical volatility, Thai Union Group is 1.27 times less risky than CP ALL. The stock trades about -0.12 of its potential returns per unit of risk. The CP ALL Public is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  6,125  in CP ALL Public on November 29, 2024 and sell it today you would lose (700.00) from holding CP ALL Public or give up 11.43% of portfolio value over 90 days.

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

Thai Union Group  vs.  CP ALL Public

Thai Union Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thai Union Group 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 quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

CP ALL Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days CP ALL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Thai Union and CP ALL

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

The idea behind Thai Union Group and CP ALL 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.