Correlation Between Fubon Financial and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Fubon Financial 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 Fubon Financial and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fubon Financial Holding and Charoen Pokphand Enterprise, you can compare the effects of market volatilities on Fubon Financial 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 Fubon Financial with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fubon Financial and Charoen Pokphand.
Diversification Opportunities for Fubon Financial and Charoen Pokphand
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fubon and Charoen is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Fubon Financial Holding and Charoen Pokphand Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Ent and Fubon Financial 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 Fubon Financial Holding 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 Ent has no effect on the direction of Fubon Financial i.e., Fubon Financial and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Fubon Financial and Charoen Pokphand
Assuming the 90 days trading horizon Fubon Financial Holding is expected to generate 0.14 times more return on investment than Charoen Pokphand. However, Fubon Financial Holding is 6.92 times less risky than Charoen Pokphand. It trades about 0.24 of its potential returns per unit of risk. Charoen Pokphand Enterprise is currently generating about -0.07 per unit of risk. If you would invest 5,790 in Fubon Financial Holding on October 22, 2024 and sell it today you would earn a total of 280.00 from holding Fubon Financial Holding or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fubon Financial Holding vs. Charoen Pokphand Enterprise
Performance |
| Timeline |
| Fubon Financial Holding |
| Charoen Pokphand Ent |
Fubon Financial and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fubon Financial and Charoen Pokphand
The main advantage of trading using opposite Fubon Financial and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fubon Financial 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.| Fubon Financial vs. Trade Van Information Services | Fubon Financial vs. Tsang Yow Industrial | Fubon Financial vs. De Licacy Industrial | Fubon Financial vs. Provision Information CoLtd |
| 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 |
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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