Correlation Between Charoen Pokphand and Hana Microelectronics
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Hana Microelectronics 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 Hana Microelectronics 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 Hana Microelectronics Public, you can compare the effects of market volatilities on Charoen Pokphand and Hana Microelectronics 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 Hana Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Hana Microelectronics.
Diversification Opportunities for Charoen Pokphand and Hana Microelectronics
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charoen and Hana is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Hana Microelectronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Microelectronics 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 Hana Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Microelectronics has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Hana Microelectronics go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Hana Microelectronics
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 0.32 times more return on investment than Hana Microelectronics. However, Charoen Pokphand Foods is 3.16 times less risky than Hana Microelectronics. It trades about -0.11 of its potential returns per unit of risk. Hana Microelectronics Public is currently generating about -0.32 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. Hana Microelectronics Public
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Hana Microelectronics |
Charoen Pokphand and Hana Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Hana Microelectronics
The main advantage of trading using opposite Charoen Pokphand and Hana Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Hana Microelectronics 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 Hana Microelectronics will offset losses from the drop in Hana Microelectronics' 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 |
| Hana Microelectronics vs. KCE Electronics Public | Hana Microelectronics vs. Land and Houses | Hana Microelectronics vs. Delta Electronics Public | Hana Microelectronics vs. The Siam Cement |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |