Correlation Between Charoen Pokphand and Akr Corporindo
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Akr Corporindo 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 Akr Corporindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charoen Pokphand Indonesia and Akr Corporindo Tbk, you can compare the effects of market volatilities on Charoen Pokphand and Akr Corporindo 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 Akr Corporindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Akr Corporindo.
Diversification Opportunities for Charoen Pokphand and Akr Corporindo
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charoen and Akr is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Indonesia and Akr Corporindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akr Corporindo Tbk 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 Indonesia are associated (or correlated) with Akr Corporindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akr Corporindo Tbk has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Akr Corporindo go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Akr Corporindo
Assuming the 90 days trading horizon Charoen Pokphand Indonesia is expected to generate 0.75 times more return on investment than Akr Corporindo. However, Charoen Pokphand Indonesia is 1.33 times less risky than Akr Corporindo. It trades about -0.05 of its potential returns per unit of risk. Akr Corporindo Tbk is currently generating about -0.05 per unit of risk. If you would invest 512,500 in Charoen Pokphand Indonesia on October 26, 2024 and sell it today you would lose (37,500) from holding Charoen Pokphand Indonesia or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Indonesia vs. Akr Corporindo Tbk
Performance |
| Timeline |
| Charoen Pokphand Ind |
| Akr Corporindo Tbk |
Charoen Pokphand and Akr Corporindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Akr Corporindo
The main advantage of trading using opposite Charoen Pokphand and Akr Corporindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Akr Corporindo 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 Akr Corporindo will offset losses from the drop in Akr Corporindo's long position.| Charoen Pokphand vs. Japfa Comfeed Indonesia | Charoen Pokphand vs. Kalbe Farma Tbk | Charoen Pokphand vs. PT Indofood Sukses | Charoen Pokphand vs. Semen Indonesia Persero |
| Akr Corporindo vs. Charoen Pokphand Indonesia | Akr Corporindo vs. Indocement Tunggal Prakarsa | Akr Corporindo vs. Bumi Serpong Damai | Akr Corporindo vs. Jasa Marga Tbk |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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