Correlation Between Advanced Info and CP ALL

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

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

Diversification Opportunities for Advanced Info and CP ALL

0.68

Correlation Coefficient

Advanced Info  CP ALL

Poor diversification

The 3 months correlation between Advanced and CPALL-R is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service 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 Advanced Info 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 Advanced Info Service 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 Advanced Info i.e., Advanced Info and CP ALL go up and down completely randomly.

Pair Corralation between Advanced Info and CP ALL

Assuming the 90 days trading horizon Advanced Info Service is expected to generate 0.89 times more return on investment than CP ALL. However, Advanced Info Service is 1.12 times less risky than CP ALL. It trades about 0.06 of its potential returns per unit of risk. CP ALL Public is currently generating about -0.03 per unit of risk. If you would invest  28,100  in Advanced Info Service on April 22, 2025 and sell it today you would earn a total of  1,300  from holding Advanced Info Service or generate 4.63% return on investment over 90 days.

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

Advanced Info Service  vs.  CP ALL Public

Advanced Info Service

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Info Service are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Advanced Info is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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. Even with relatively invariable essential indicators, CP ALL is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Advanced Info and CP ALL

The main advantage of trading using opposite Advanced Info and CP ALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info 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 Advanced Info Service 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.