Correlation Between Charoen Pokphand and Uni President
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Uni President 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 Charoen Pokphand and Uni President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charoen Pokphand Enterprise and Uni President Enterprises Corp, you can compare the effects of market volatilities on Charoen Pokphand and Uni President 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 Charoen Pokphand with a short position of Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Uni President.
Diversification Opportunities for Charoen Pokphand and Uni President
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charoen and Uni is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Enterprise and Uni President Enterprises Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President Enterp and Charoen Pokphand 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 Charoen Pokphand Enterprise are associated (or correlated) with Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President Enterp has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Uni President go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Uni President
Assuming the 90 days trading horizon Charoen Pokphand is expected to generate 5.02 times less return on investment than Uni President. In addition to that, Charoen Pokphand is 1.07 times more volatile than Uni President Enterprises Corp. It trades about 0.01 of its total potential returns per unit of risk. Uni President Enterprises Corp is currently generating about 0.07 per unit of volatility. If you would invest 8,280 in Uni President Enterprises Corp on August 28, 2024 and sell it today you would earn a total of 420.00 from holding Uni President Enterprises Corp or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Enterprise vs. Uni President Enterprises Corp
Performance |
| Timeline |
| Charoen Pokphand Ent |
| Uni President Enterp |
Charoen Pokphand and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Uni President
The main advantage of trading using opposite Charoen Pokphand and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President's long position.| Charoen Pokphand vs. Taiwan Cement Corp | Charoen Pokphand vs. Ruentex Development Co | Charoen Pokphand vs. Symtek Automation Asia | Charoen Pokphand vs. CTCI Corp |
| Uni President vs. Taiwan Cement Corp | Uni President vs. Ruentex Development Co | Uni President vs. Symtek Automation Asia | Uni President vs. CTCI Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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