Correlation Between PT Charoen and Wilmar International
Can any of the company-specific risk be diversified away by investing in both PT Charoen and Wilmar International 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 Wilmar International 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 Wilmar International Limited, you can compare the effects of market volatilities on PT Charoen and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Charoen and Wilmar International.
Diversification Opportunities for PT Charoen and Wilmar International
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0CP1 and Wilmar is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding PT Charoen Pokphand and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of PT Charoen i.e., PT Charoen and Wilmar International go up and down completely randomly.
Pair Corralation between PT Charoen and Wilmar International
Assuming the 90 days trading horizon PT Charoen Pokphand is expected to under-perform the Wilmar International. In addition to that, PT Charoen is 1.37 times more volatile than Wilmar International Limited. It trades about -0.02 of its total potential returns per unit of risk. Wilmar International Limited is currently generating about 0.0 per unit of volatility. If you would invest 219.00 in Wilmar International Limited on September 24, 2024 and sell it today you would lose (4.00) from holding Wilmar International Limited or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Charoen Pokphand vs. Wilmar International Limited
Performance |
| Timeline |
| PT Charoen Pokphand |
| Wilmar International |
PT Charoen and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Charoen and Wilmar International
The main advantage of trading using opposite PT Charoen and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Charoen position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| PT Charoen vs. Tyson Foods | PT Charoen vs. Wilmar International Limited | PT Charoen vs. MOWI ASA SPADR | PT Charoen vs. Mowi ASA |
| Wilmar International vs. Tyson Foods | Wilmar International vs. MOWI ASA SPADR | Wilmar International vs. Mowi ASA | Wilmar International vs. PT Charoen Pokphand |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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