Correlation Between Materialise and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Materialise and Charoen Pokphand 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 Materialise and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Charoen Pokphand Foods, you can compare the effects of market volatilities on Materialise and Charoen Pokphand 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 Materialise with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Charoen Pokphand.
Diversification Opportunities for Materialise and Charoen Pokphand
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Materialise and Charoen is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Charoen Pokphand Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Foods and Materialise 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 Materialise NV are associated (or correlated) with Charoen Pokphand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charoen Pokphand Foods has no effect on the direction of Materialise i.e., Materialise and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Materialise and Charoen Pokphand
Assuming the 90 days trading horizon Materialise NV is expected to under-perform the Charoen Pokphand. In addition to that, Materialise is 2.12 times more volatile than Charoen Pokphand Foods. It trades about -0.32 of its total potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.09 per unit of volatility. If you would invest 66.00 in Charoen Pokphand Foods on January 4, 2025 and sell it today you would lose (2.00) from holding Charoen Pokphand Foods or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Materialise NV |
| Charoen Pokphand Foods |
Materialise and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Charoen Pokphand
The main advantage of trading using opposite Materialise and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Charoen Pokphand 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 Charoen Pokphand will offset losses from the drop in Charoen Pokphand's long position.| Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc | Materialise vs. Apple Inc |
| Charoen Pokphand vs. Archer Daniels Midland | Charoen Pokphand vs. Archer Daniels Midland | Charoen Pokphand vs. Tyson Foods | Charoen Pokphand vs. Wilmar International Limited |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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