Correlation Between CIMB Thai and Synergetic Auto

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Can any of the company-specific risk be diversified away by investing in both CIMB Thai and Synergetic Auto 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 CIMB Thai and Synergetic Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIMB Thai Bank and Synergetic Auto Performance, you can compare the effects of market volatilities on CIMB Thai and Synergetic Auto 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 CIMB Thai with a short position of Synergetic Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and Synergetic Auto.

Diversification Opportunities for CIMB Thai and Synergetic Auto

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between CIMB and Synergetic is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and Synergetic Auto Performance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergetic Auto Perf and CIMB Thai 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 CIMB Thai Bank are associated (or correlated) with Synergetic Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergetic Auto Perf has no effect on the direction of CIMB Thai i.e., CIMB Thai and Synergetic Auto go up and down completely randomly.

Pair Corralation between CIMB Thai and Synergetic Auto

Assuming the 90 days trading horizon CIMB Thai Bank is expected to under-perform the Synergetic Auto. In addition to that, CIMB Thai is 1.99 times more volatile than Synergetic Auto Performance. It trades about -0.19 of its total potential returns per unit of risk. Synergetic Auto Performance is currently generating about -0.04 per unit of volatility. If you would invest  137.00  in Synergetic Auto Performance on April 25, 2025 and sell it today you would lose (7.00) from holding Synergetic Auto Performance or give up 5.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

CIMB Thai Bank  vs.  Synergetic Auto Performance

 Performance 
       Timeline  
CIMB Thai Bank 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CIMB Thai Bank 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 August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Synergetic Auto Perf 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Synergetic Auto Performance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Synergetic Auto is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

CIMB Thai and Synergetic Auto Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CIMB Thai and Synergetic Auto

The main advantage of trading using opposite CIMB Thai and Synergetic Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIMB Thai position performs unexpectedly, Synergetic Auto 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 Synergetic Auto will offset losses from the drop in Synergetic Auto's long position.
The idea behind CIMB Thai Bank and Synergetic Auto Performance 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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