Correlation Between Charoen Pokphand and Haad Thip
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Haad Thip 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 Haad Thip 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 Haad Thip Public, you can compare the effects of market volatilities on Charoen Pokphand and Haad Thip 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 Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Haad Thip.
Diversification Opportunities for Charoen Pokphand and Haad Thip
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charoen and Haad is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip 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 Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Haad Thip go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Haad Thip
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to under-perform the Haad Thip. But the stock apears to be less risky and, when comparing its historical volatility, Charoen Pokphand Foods is 1.26 times less risky than Haad Thip. The stock trades about -0.19 of its potential returns per unit of risk. The Haad Thip Public is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Haad Thip Public on August 31, 2024 and sell it today you would lose (30.00) from holding Haad Thip Public or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Haad Thip Public
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Haad Thip Public |
Charoen Pokphand and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Haad Thip
The main advantage of trading using opposite Charoen Pokphand and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Haad Thip 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 Haad Thip will offset losses from the drop in Haad Thip's long position.| Charoen Pokphand vs. MK Restaurant Group | Charoen Pokphand vs. TRC Construction Public | Charoen Pokphand vs. Bangkok Expressway and | Charoen Pokphand vs. Lohakit Metal Public |
| Haad Thip vs. MK Restaurant Group | Haad Thip vs. TRC Construction Public | Haad Thip vs. Bangkok Expressway and | Haad Thip vs. Lohakit Metal 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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