Correlation Between Charoen Pokphand and Chukai Public
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Chukai Public 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 Charoen Pokphand and Chukai Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charoen Pokphand Foods and Chukai Public, you can compare the effects of market volatilities on Charoen Pokphand and Chukai Public 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 Charoen Pokphand with a short position of Chukai Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Chukai Public.
Diversification Opportunities for Charoen Pokphand and Chukai Public
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Charoen and Chukai is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Chukai Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chukai Public and Charoen Pokphand 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 Charoen Pokphand Foods are associated (or correlated) with Chukai Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chukai Public has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Chukai Public go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Chukai Public
Assuming the 90 days trading horizon Charoen Pokphand is expected to generate 153.8 times less return on investment than Chukai Public. But when comparing it to its historical volatility, Charoen Pokphand Foods is 28.69 times less risky than Chukai Public. It trades about 0.01 of its potential returns per unit of risk. Chukai Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 161.00 in Chukai Public on November 5, 2024 and sell it today you would lose (108.00) from holding Chukai Public or give up 67.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Chukai Public
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Chukai Public |
Charoen Pokphand and Chukai Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Chukai Public
The main advantage of trading using opposite Charoen Pokphand and Chukai Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Chukai Public 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 Chukai Public will offset losses from the drop in Chukai Public's long position.| Charoen Pokphand vs. CP ALL Public | Charoen Pokphand vs. The Siam Cement | Charoen Pokphand vs. OSOTSPA PCL NVDR | Charoen Pokphand vs. The Siam Commercial |
| Chukai Public vs. Christiani Nielsen Public | Chukai Public vs. Castle Peak Holdings | Chukai Public vs. Capital Engineering Network | Chukai Public vs. CH Karnchang 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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