Correlation Between National Beverage and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both National Beverage and Charoen Pokphand 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 National Beverage and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and Charoen Pokphand Foods, you can compare the effects of market volatilities on National Beverage and Charoen Pokphand 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 National Beverage with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Charoen Pokphand.
Diversification Opportunities for National Beverage and Charoen Pokphand
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Charoen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Charoen Pokphand Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Foods and National Beverage 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 National Beverage Corp are associated (or correlated) with Charoen Pokphand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charoen Pokphand Foods has no effect on the direction of National Beverage i.e., National Beverage and Charoen Pokphand go up and down completely randomly.
Pair Corralation between National Beverage and Charoen Pokphand
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Charoen Pokphand. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.33 times less risky than Charoen Pokphand. The stock trades about -0.04 of its potential returns per unit of risk. The Charoen Pokphand Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Charoen Pokphand Foods on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Charoen Pokphand Foods or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Charoen Pokphand Foods
Performance |
| Timeline |
| National Beverage Corp |
| Charoen Pokphand Foods |
National Beverage and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Charoen Pokphand
The main advantage of trading using opposite National Beverage and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Charoen Pokphand 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 Charoen Pokphand will offset losses from the drop in Charoen Pokphand's long position.| National Beverage vs. Superior Plus Corp | National Beverage vs. SIVERS SEMICONDUCTORS AB | National Beverage vs. NorAm Drilling AS | National Beverage vs. Norsk Hydro ASA |
| Charoen Pokphand vs. Tyson Foods | Charoen Pokphand vs. Mowi ASA | Charoen Pokphand vs. SalMar ASA | Charoen Pokphand vs. Superior Plus 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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