Correlation Between Barito Pacific and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Barito Pacific 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 Barito Pacific and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barito Pacific Tbk and Charoen Pokphand Indonesia, you can compare the effects of market volatilities on Barito Pacific 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 Barito Pacific with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barito Pacific and Charoen Pokphand.
Diversification Opportunities for Barito Pacific and Charoen Pokphand
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barito and Charoen is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Barito Pacific Tbk 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 Barito Pacific 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 Barito Pacific Tbk 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 Barito Pacific i.e., Barito Pacific and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Barito Pacific and Charoen Pokphand
Assuming the 90 days trading horizon Barito Pacific Tbk is expected to under-perform the Charoen Pokphand. But the stock apears to be less risky and, when comparing its historical volatility, Barito Pacific Tbk is 1.09 times less risky than Charoen Pokphand. The stock trades about -0.48 of its potential returns per unit of risk. The Charoen Pokphand Indonesia is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 512,500 in Charoen Pokphand Indonesia on August 27, 2024 and sell it today you would lose (41,500) from holding Charoen Pokphand Indonesia or give up 8.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barito Pacific Tbk vs. Charoen Pokphand Indonesia
Performance |
| Timeline |
| Barito Pacific Tbk |
| Charoen Pokphand Ind |
Barito Pacific and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barito Pacific and Charoen Pokphand
The main advantage of trading using opposite Barito Pacific and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barito Pacific 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.| Barito Pacific vs. Indah Kiat Pulp | Barito Pacific vs. Medco Energi Internasional | Barito Pacific vs. Vale Indonesia Tbk | Barito Pacific vs. Charoen Pokphand Indonesia |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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