Correlation Between CP ALL and Thanachart Capital

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

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

Diversification Opportunities for CP ALL and Thanachart Capital

0.72

Correlation Coefficient

CP ALL  Thanachart Capital

Poor diversification

The 3 months correlation between CPALL and Thanachart is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Thanachart Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thanachart Capital Public and CP ALL 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 CP ALL Public are associated (or correlated) with Thanachart Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thanachart Capital Public has no effect on the direction of CP ALL i.e., CP ALL and Thanachart Capital go up and down completely randomly.

Pair Corralation between CP ALL and Thanachart Capital

Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Thanachart Capital. In addition to that, CP ALL is 1.59 times more volatile than Thanachart Capital Public. It trades about -0.01 of its total potential returns per unit of risk. Thanachart Capital Public is currently generating about 0.02 per unit of volatility. If you would invest  4,700  in Thanachart Capital Public on April 23, 2025 and sell it today you would earn a total of  50.00  from holding Thanachart Capital Public or generate 1.06% return on investment over 90 days.

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

CP ALL Public  vs.  Thanachart Capital Public

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 somewhat strong fundamental drivers, CP ALL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Thanachart Capital Public

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thanachart Capital Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Thanachart Capital 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 CP ALL and Thanachart Capital

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

The idea behind CP ALL Public and Thanachart Capital 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.