Correlation Between Charoen Pokphand and Agripure Holdings
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Agripure Holdings 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 Agripure Holdings 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 Agripure Holdings Public, you can compare the effects of market volatilities on Charoen Pokphand and Agripure Holdings 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 Agripure Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Agripure Holdings.
Diversification Opportunities for Charoen Pokphand and Agripure Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Charoen and Agripure is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Agripure Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripure Holdings 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 Agripure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripure Holdings Public has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Agripure Holdings go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Agripure Holdings
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 0.99 times more return on investment than Agripure Holdings. However, Charoen Pokphand Foods is 1.01 times less risky than Agripure Holdings. It trades about -0.11 of its potential returns per unit of risk. Agripure Holdings Public is currently generating about -0.23 per unit of risk. 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 |
Charoen Pokphand Foods vs. Agripure Holdings Public
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Agripure Holdings Public |
Charoen Pokphand and Agripure Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Agripure Holdings
The main advantage of trading using opposite Charoen Pokphand and Agripure Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Agripure Holdings 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 Agripure Holdings will offset losses from the drop in Agripure Holdings' long position.| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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