Correlation Between PT Charoen and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both PT Charoen and SalMar ASA 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 PT Charoen and SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Charoen Pokphand and SalMar ASA, you can compare the effects of market volatilities on PT Charoen and SalMar ASA 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 PT Charoen with a short position of SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Charoen and SalMar ASA.
Diversification Opportunities for PT Charoen and SalMar ASA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 0CP1 and SalMar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Charoen Pokphand and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA and PT Charoen 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 PT Charoen Pokphand are associated (or correlated) with SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of PT Charoen i.e., PT Charoen and SalMar ASA go up and down completely randomly.
Pair Corralation between PT Charoen and SalMar ASA
Assuming the 90 days trading horizon PT Charoen is expected to generate 2.73 times less return on investment than SalMar ASA. In addition to that, PT Charoen is 1.57 times more volatile than SalMar ASA. It trades about 0.01 of its total potential returns per unit of risk. SalMar ASA is currently generating about 0.03 per unit of volatility. If you would invest 3,799 in SalMar ASA on October 12, 2024 and sell it today you would earn a total of 781.00 from holding SalMar ASA or generate 20.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Charoen Pokphand vs. SalMar ASA
Performance |
| Timeline |
| PT Charoen Pokphand |
| SalMar ASA |
PT Charoen and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Charoen and SalMar ASA
The main advantage of trading using opposite PT Charoen and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Charoen position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| PT Charoen vs. CEOTRONICS | PT Charoen vs. Dalata Hotel Group | PT Charoen vs. DALATA HOTEL | PT Charoen vs. Choice Hotels International |
| SalMar ASA vs. Archer Daniels Midland | SalMar ASA vs. Tyson Foods | SalMar ASA vs. Superior Plus Corp | SalMar ASA vs. NMI Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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