Correlation Between Wiwynn Corp and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Wiwynn Corp 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 Wiwynn Corp and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wiwynn Corp and Charoen Pokphand Enterprise, you can compare the effects of market volatilities on Wiwynn Corp 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 Wiwynn Corp with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wiwynn Corp and Charoen Pokphand.
Diversification Opportunities for Wiwynn Corp and Charoen Pokphand
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wiwynn and Charoen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Wiwynn Corp 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 Wiwynn Corp 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 Wiwynn 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 Ent has no effect on the direction of Wiwynn Corp i.e., Wiwynn Corp and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Wiwynn Corp and Charoen Pokphand
Assuming the 90 days trading horizon Wiwynn Corp is expected to under-perform the Charoen Pokphand. In addition to that, Wiwynn Corp is 5.1 times more volatile than Charoen Pokphand Enterprise. It trades about -0.25 of its total potential returns per unit of risk. Charoen Pokphand Enterprise is currently generating about 0.15 per unit of volatility. If you would invest 9,150 in Charoen Pokphand Enterprise on November 3, 2024 and sell it today you would earn a total of 130.00 from holding Charoen Pokphand Enterprise or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wiwynn Corp vs. Charoen Pokphand Enterprise
Performance |
| Timeline |
| Wiwynn Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Charoen Pokphand Ent |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wiwynn Corp and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wiwynn Corp and Charoen Pokphand
The main advantage of trading using opposite Wiwynn Corp and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wiwynn Corp 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.The idea behind Wiwynn Corp and Charoen Pokphand Enterprise pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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