Correlation Between Charoen Pokphand and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Bintang Oto 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 Bintang Oto 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 Bintang Oto Global, you can compare the effects of market volatilities on Charoen Pokphand and Bintang Oto 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 Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Bintang Oto.
Diversification Opportunities for Charoen Pokphand and Bintang Oto
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charoen and Bintang is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Indonesia and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global 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 Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Bintang Oto go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Bintang Oto
Assuming the 90 days trading horizon Charoen Pokphand Indonesia is expected to generate 0.99 times more return on investment than Bintang Oto. However, Charoen Pokphand Indonesia is 1.01 times less risky than Bintang Oto. It trades about -0.01 of its potential returns per unit of risk. Bintang Oto Global is currently generating about -0.08 per unit of risk. If you would invest 568,415 in Charoen Pokphand Indonesia on September 2, 2024 and sell it today you would lose (99,415) from holding Charoen Pokphand Indonesia or give up 17.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Indonesia vs. Bintang Oto Global
Performance |
| Timeline |
| Charoen Pokphand Ind |
| Bintang Oto Global |
Charoen Pokphand and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Bintang Oto
The main advantage of trading using opposite Charoen Pokphand and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Charoen Pokphand vs. Bank BRISyariah Tbk | Charoen Pokphand vs. Mitra Pinasthika Mustika | Charoen Pokphand vs. Jakarta Int Hotels | Charoen Pokphand vs. Indosterling Technomedia Tbk |
| Bintang Oto vs. Japfa Comfeed Indonesia | Bintang Oto vs. Charoen Pokphand Indonesia | Bintang Oto vs. Erajaya Swasembada Tbk | Bintang Oto vs. Indofood Cbp Sukses |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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