Correlation Between Agripure Holdings and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Agripure Holdings 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 Agripure Holdings and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agripure Holdings Public and Charoen Pokphand Foods, you can compare the effects of market volatilities on Agripure Holdings 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 Agripure Holdings with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agripure Holdings and Charoen Pokphand.
Diversification Opportunities for Agripure Holdings and Charoen Pokphand
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Agripure and Charoen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Agripure Holdings Public 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 Agripure Holdings 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 Agripure Holdings Public 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 Agripure Holdings i.e., Agripure Holdings and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Agripure Holdings and Charoen Pokphand
Assuming the 90 days trading horizon Agripure Holdings Public is expected to under-perform the Charoen Pokphand. In addition to that, Agripure Holdings is 1.01 times more volatile than Charoen Pokphand Foods. It trades about -0.23 of its total potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.11 per unit of volatility. If you would invest 2,470 in Charoen Pokphand Foods on August 28, 2024 and sell it today you would lose (70.00) from holding Charoen Pokphand Foods or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agripure Holdings Public vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Agripure Holdings Public |
| Charoen Pokphand Foods |
Agripure Holdings and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agripure Holdings and Charoen Pokphand
The main advantage of trading using opposite Agripure Holdings and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agripure Holdings 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 Agripure Holdings Public and Charoen Pokphand Foods 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.| Charoen Pokphand vs. CP ALL Public | Charoen Pokphand vs. PTT Public | Charoen Pokphand vs. Bangkok Bank Public | Charoen Pokphand vs. SCB X Public |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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