Correlation Between Bangkok Dusit and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Bangkok Dusit 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 Bangkok Dusit and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bangkok Dusit Medical and Charoen Pokphand Foods, you can compare the effects of market volatilities on Bangkok Dusit 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 Bangkok Dusit with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangkok Dusit and Charoen Pokphand.
Diversification Opportunities for Bangkok Dusit and Charoen Pokphand
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bangkok and Charoen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bangkok Dusit Medical 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 Bangkok Dusit 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 Bangkok Dusit Medical 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 Bangkok Dusit i.e., Bangkok Dusit and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Bangkok Dusit and Charoen Pokphand
Assuming the 90 days trading horizon Bangkok Dusit Medical is expected to under-perform the Charoen Pokphand. In addition to that, Bangkok Dusit is 1.27 times more volatile than Charoen Pokphand Foods. It trades about -0.27 of its total potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.1 per unit of volatility. If you would invest 2,470 in Charoen Pokphand Foods on August 29, 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 |
Bangkok Dusit Medical vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Bangkok Dusit Medical |
| Charoen Pokphand Foods |
Bangkok Dusit and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bangkok Dusit and Charoen Pokphand
The main advantage of trading using opposite Bangkok Dusit and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bangkok Dusit 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.| Bangkok Dusit vs. Bumrungrad Hospital Public | Bangkok Dusit vs. Bangkok Chain Hospital | Bangkok Dusit vs. Ramkhamhaeng Hospital Public | Bangkok Dusit vs. Vibhavadi Medical Center |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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