Correlation Between Charoen Pokphand and Thai Vegetable
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Thai Vegetable 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 Thai Vegetable 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 Thai Vegetable Oil, you can compare the effects of market volatilities on Charoen Pokphand and Thai Vegetable 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 Thai Vegetable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Thai Vegetable.
Diversification Opportunities for Charoen Pokphand and Thai Vegetable
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charoen and Thai is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Thai Vegetable Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Vegetable Oil 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 Thai Vegetable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Vegetable Oil has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Thai Vegetable go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Thai Vegetable
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to under-perform the Thai Vegetable. In addition to that, Charoen Pokphand is 1.17 times more volatile than Thai Vegetable Oil. It trades about -0.16 of its total potential returns per unit of risk. Thai Vegetable Oil is currently generating about -0.14 per unit of volatility. If you would invest 2,430 in Thai Vegetable Oil on August 24, 2024 and sell it today you would lose (70.00) from holding Thai Vegetable Oil or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Thai Vegetable Oil
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Thai Vegetable Oil |
Charoen Pokphand and Thai Vegetable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Thai Vegetable
The main advantage of trading using opposite Charoen Pokphand and Thai Vegetable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Thai Vegetable 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 Thai Vegetable will offset losses from the drop in Thai Vegetable's long position.| Charoen Pokphand vs. CP ALL Public | Charoen Pokphand vs. Carabao Group Public | Charoen Pokphand vs. Thai Union Group | Charoen Pokphand vs. Minor International Public |
| Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. TISCO Financial Group | Thai Vegetable vs. Thanachart Capital 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |