Correlation Between Charoen Pokphand and Intouch Holdings
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Intouch 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 Intouch 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 Intouch Holdings Public, you can compare the effects of market volatilities on Charoen Pokphand and Intouch 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 Intouch Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Intouch Holdings.
Diversification Opportunities for Charoen Pokphand and Intouch Holdings
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charoen and Intouch is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Intouch Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch 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 Intouch Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Holdings Public has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Intouch Holdings go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Intouch Holdings
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to under-perform the Intouch Holdings. In addition to that, Charoen Pokphand is 1.46 times more volatile than Intouch Holdings Public. It trades about -0.09 of its total potential returns per unit of risk. Intouch Holdings Public is currently generating about 0.06 per unit of volatility. If you would invest 9,575 in Intouch Holdings Public on November 4, 2024 and sell it today you would earn a total of 150.00 from holding Intouch Holdings Public or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Intouch Holdings Public
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Intouch Holdings Public |
Charoen Pokphand and Intouch Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Intouch Holdings
The main advantage of trading using opposite Charoen Pokphand and Intouch Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Intouch 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 Intouch Holdings will offset losses from the drop in Intouch 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 |
| Intouch Holdings vs. Advanced Info Service | Intouch Holdings vs. PTT Global Chemical | Intouch Holdings vs. PTT Public | Intouch Holdings vs. CP ALL 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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