Correlation Between Charoen Pokphand and Tingyi Holding
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Tingyi Holding 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 Tingyi Holding 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 Tingyi Holding Corp, you can compare the effects of market volatilities on Charoen Pokphand and Tingyi Holding 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 Tingyi Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Tingyi Holding.
Diversification Opportunities for Charoen Pokphand and Tingyi Holding
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charoen and Tingyi is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Enterprise and Tingyi Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tingyi Holding Corp 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 Tingyi Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tingyi Holding Corp has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Tingyi Holding go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Tingyi Holding
Assuming the 90 days trading horizon Charoen Pokphand Enterprise is expected to generate 0.41 times more return on investment than Tingyi Holding. However, Charoen Pokphand Enterprise is 2.47 times less risky than Tingyi Holding. It trades about 0.22 of its potential returns per unit of risk. Tingyi Holding Corp is currently generating about -0.34 per unit of risk. If you would invest 9,660 in Charoen Pokphand Enterprise on August 28, 2024 and sell it today you would earn a total of 250.00 from holding Charoen Pokphand Enterprise or generate 2.59% 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. Tingyi Holding Corp
Performance |
| Timeline |
| Charoen Pokphand Ent |
| Tingyi Holding Corp |
Charoen Pokphand and Tingyi Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Tingyi Holding
The main advantage of trading using opposite Charoen Pokphand and Tingyi Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Tingyi Holding 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 Tingyi Holding will offset losses from the drop in Tingyi Holding'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 |
| Tingyi Holding vs. Uni President Enterprises Corp | Tingyi Holding vs. Lien Hwa Industrial | Tingyi Holding vs. Great Wall Enterprise | Tingyi Holding vs. Standard Foods 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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