Correlation Between Federal Agricultural and PT Charoen
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and PT Charoen 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 Federal Agricultural and PT Charoen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Agricultural Mortgage and PT Charoen Pokphand, you can compare the effects of market volatilities on Federal Agricultural and PT Charoen 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 Federal Agricultural with a short position of PT Charoen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and PT Charoen.
Diversification Opportunities for Federal Agricultural and PT Charoen
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and 0CP1 is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and PT Charoen Pokphand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Charoen Pokphand and Federal Agricultural 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 Federal Agricultural Mortgage are associated (or correlated) with PT Charoen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Charoen Pokphand has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and PT Charoen go up and down completely randomly.
Pair Corralation between Federal Agricultural and PT Charoen
Assuming the 90 days horizon Federal Agricultural Mortgage is expected to generate 0.71 times more return on investment than PT Charoen. However, Federal Agricultural Mortgage is 1.41 times less risky than PT Charoen. It trades about 0.07 of its potential returns per unit of risk. PT Charoen Pokphand is currently generating about 0.0 per unit of risk. If you would invest 10,037 in Federal Agricultural Mortgage on September 26, 2024 and sell it today you would earn a total of 9,063 from holding Federal Agricultural Mortgage or generate 90.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. PT Charoen Pokphand
Performance |
| Timeline |
| Federal Agricultural |
| PT Charoen Pokphand |
Federal Agricultural and PT Charoen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and PT Charoen
The main advantage of trading using opposite Federal Agricultural and PT Charoen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, PT Charoen 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 PT Charoen will offset losses from the drop in PT Charoen's long position.| Federal Agricultural vs. Visa Inc | Federal Agricultural vs. Visa Inc | Federal Agricultural vs. Mastercard | Federal Agricultural vs. Mastercard |
| PT Charoen vs. Archer Daniels Midland | PT Charoen vs. Tyson Foods | PT Charoen vs. MOWI ASA SPADR | PT Charoen vs. Mowi ASA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |