Correlation Between Akasha Wira and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Akasha Wira 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 Akasha Wira and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akasha Wira International and Charoen Pokphand Indonesia, you can compare the effects of market volatilities on Akasha Wira 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 Akasha Wira with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akasha Wira and Charoen Pokphand.
Diversification Opportunities for Akasha Wira and Charoen Pokphand
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akasha and Charoen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Akasha Wira International and Charoen Pokphand Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Ind and Akasha Wira 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 Akasha Wira International 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 Ind has no effect on the direction of Akasha Wira i.e., Akasha Wira and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Akasha Wira and Charoen Pokphand
Assuming the 90 days trading horizon Akasha Wira International is expected to under-perform the Charoen Pokphand. In addition to that, Akasha Wira is 1.19 times more volatile than Charoen Pokphand Indonesia. It trades about -0.04 of its total potential returns per unit of risk. Charoen Pokphand Indonesia is currently generating about 0.0 per unit of volatility. If you would invest 470,000 in Charoen Pokphand Indonesia on August 29, 2024 and sell it today you would lose (4,000) from holding Charoen Pokphand Indonesia or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Akasha Wira International vs. Charoen Pokphand Indonesia
Performance |
| Timeline |
| Akasha Wira International |
| Charoen Pokphand Ind |
Akasha Wira and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akasha Wira and Charoen Pokphand
The main advantage of trading using opposite Akasha Wira and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akasha Wira 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.| Akasha Wira vs. FKS Food Sejahtera | Akasha Wira vs. Wilmar Cahaya Indonesia | Akasha Wira vs. Polychem Indonesia Tbk | Akasha Wira vs. Astra Graphia Tbk |
| Charoen Pokphand vs. Japfa Comfeed Indonesia | Charoen Pokphand vs. Kalbe Farma Tbk | Charoen Pokphand vs. PT Indofood Sukses | Charoen Pokphand vs. Semen Indonesia Persero |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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