Correlation Between Charoen Pokphand and Italian Thai
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Italian Thai 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 Italian Thai 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 Italian Thai Development Public, you can compare the effects of market volatilities on Charoen Pokphand and Italian Thai 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 Italian Thai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Italian Thai.
Diversification Opportunities for Charoen Pokphand and Italian Thai
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Charoen and Italian is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Italian Thai Development Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Italian Thai Develop 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 Italian Thai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Italian Thai Develop has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Italian Thai go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Italian Thai
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 0.36 times more return on investment than Italian Thai. However, Charoen Pokphand Foods is 2.76 times less risky than Italian Thai. It trades about -0.19 of its potential returns per unit of risk. Italian Thai Development Public is currently generating about -0.36 per unit of risk. If you would invest 2,490 in Charoen Pokphand Foods on August 31, 2024 and sell it today you would lose (120.00) from holding Charoen Pokphand Foods or give up 4.82% 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. Italian Thai Development Publi
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Italian Thai Develop |
Charoen Pokphand and Italian Thai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Italian Thai
The main advantage of trading using opposite Charoen Pokphand and Italian Thai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Italian Thai 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 Italian Thai will offset losses from the drop in Italian Thai'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 |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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