Correlation Between Charoen Pokphand and Hunya Foods
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Hunya Foods 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 Hunya Foods 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 Hunya Foods Co, you can compare the effects of market volatilities on Charoen Pokphand and Hunya Foods 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 Hunya Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Hunya Foods.
Diversification Opportunities for Charoen Pokphand and Hunya Foods
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charoen and Hunya is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Enterprise and Hunya Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunya Foods 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 Hunya Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunya Foods has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Hunya Foods go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Hunya Foods
Assuming the 90 days trading horizon Charoen Pokphand Enterprise is expected to generate 0.79 times more return on investment than Hunya Foods. However, Charoen Pokphand Enterprise is 1.26 times less risky than Hunya Foods. It trades about 0.15 of its potential returns per unit of risk. Hunya Foods Co is currently generating about 0.05 per unit of risk. If you would invest 9,730 in Charoen Pokphand Enterprise on September 3, 2024 and sell it today you would earn a total of 170.00 from holding Charoen Pokphand Enterprise or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Enterprise vs. Hunya Foods Co
Performance |
| Timeline |
| Charoen Pokphand Ent |
| Hunya Foods |
Charoen Pokphand and Hunya Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Hunya Foods
The main advantage of trading using opposite Charoen Pokphand and Hunya Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Hunya Foods 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 Hunya Foods will offset losses from the drop in Hunya Foods' long position.| Charoen Pokphand vs. Great Wall Enterprise | Charoen Pokphand vs. TTET Union Corp | Charoen Pokphand vs. Uni President Enterprises Corp | Charoen Pokphand vs. Lien Hwa Industrial |
| Hunya Foods vs. Standard Foods Corp | Hunya Foods vs. TTET Union Corp | Hunya Foods vs. Uni President Enterprises Corp | Hunya Foods vs. Charoen Pokphand Enterprise |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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