Correlation Between INTER CARS and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both INTER CARS 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 INTER CARS and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and Charoen Pokphand Foods, you can compare the effects of market volatilities on INTER CARS 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 INTER CARS with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Charoen Pokphand.
Diversification Opportunities for INTER CARS and Charoen Pokphand
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between INTER and Charoen is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA 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 INTER CARS 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 INTER CARS SA 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 INTER CARS i.e., INTER CARS and Charoen Pokphand go up and down completely randomly.
Pair Corralation between INTER CARS and Charoen Pokphand
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.75 times more return on investment than Charoen Pokphand. However, INTER CARS SA is 1.33 times less risky than Charoen Pokphand. It trades about 0.03 of its potential returns per unit of risk. Charoen Pokphand Foods is currently generating about 0.02 per unit of risk. If you would invest 9,732 in INTER CARS SA on September 14, 2024 and sell it today you would earn a total of 1,848 from holding INTER CARS SA or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. Charoen Pokphand Foods
Performance |
| Timeline |
| INTER CARS SA |
| Charoen Pokphand Foods |
INTER CARS and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Charoen Pokphand
The main advantage of trading using opposite INTER CARS and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS 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.| INTER CARS vs. Bridgestone | INTER CARS vs. Superior Plus Corp | INTER CARS vs. SIVERS SEMICONDUCTORS AB | INTER CARS vs. Norsk Hydro ASA |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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