Correlation Between CIMB Thai and Regional Container

Can any of the company-specific risk be diversified away by investing in both CIMB Thai and Regional Container 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 Regional Container 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 Regional Container Lines, you can compare the effects of market volatilities on CIMB Thai and Regional Container 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 Regional Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIMB Thai and Regional Container.

Diversification Opportunities for CIMB Thai and Regional Container

-0.46

Correlation Coefficient

CIMB Thai  Regional Container

Very good diversification

The 3 months correlation between CIMB and Regional is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CIMB Thai Bank and Regional Container Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Container Lines 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 Regional Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Container Lines has no effect on the direction of CIMB Thai i.e., CIMB Thai and Regional Container go up and down completely randomly.

Pair Corralation between CIMB Thai and Regional Container

Assuming the 90 days trading horizon CIMB Thai Bank is expected to under-perform the Regional Container. In addition to that, CIMB Thai is 2.34 times more volatile than Regional Container Lines. It trades about -0.18 of its total potential returns per unit of risk. Regional Container Lines is currently generating about 0.24 per unit of volatility. If you would invest  2,360  in Regional Container Lines on April 24, 2025 and sell it today you would earn a total of  590.00  from holding Regional Container Lines or generate 25.0% return on investment over 90 days.

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

CIMB Thai Bank  vs.  Regional Container Lines

CIMB Thai Bank

Risk-Adjusted Performance

Very Weak

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.

Regional Container Lines

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Regional Container Lines are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Regional Container sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CIMB Thai and Regional Container

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

The idea behind CIMB Thai Bank and Regional Container Lines 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.