Correlation Between COSMOSTEEL HLDGS and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and Charoen Pokphand Foods, you can compare the effects of market volatilities on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and Charoen Pokphand.
Diversification Opportunities for COSMOSTEEL HLDGS and Charoen Pokphand
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between COSMOSTEEL and Charoen is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Charoen Pokphand go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and Charoen Pokphand
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 0.82 times more return on investment than Charoen Pokphand. However, COSMOSTEEL HLDGS is 1.22 times less risky than Charoen Pokphand. It trades about 0.09 of its potential returns per unit of risk. Charoen Pokphand Foods is currently generating about 0.07 per unit of risk. If you would invest 6.75 in COSMOSTEEL HLDGS on November 4, 2024 and sell it today you would earn a total of 0.25 from holding COSMOSTEEL HLDGS or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMOSTEEL HLDGS vs. Charoen Pokphand Foods
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| Charoen Pokphand Foods |
COSMOSTEEL HLDGS and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and Charoen Pokphand
The main advantage of trading using opposite COSMOSTEEL HLDGS and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS 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.| COSMOSTEEL HLDGS vs. FRACTAL GAMING GROUP | COSMOSTEEL HLDGS vs. GAMING FAC SA | COSMOSTEEL HLDGS vs. PLAYMATES TOYS | COSMOSTEEL HLDGS vs. BAKED GAMES SA |
| Charoen Pokphand vs. Gol Intelligent Airlines | Charoen Pokphand vs. Media and Games | Charoen Pokphand vs. FRACTAL GAMING GROUP | Charoen Pokphand vs. United Airlines Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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