Correlation Between Charoen Pokphand and Erajaya Swasembada
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Erajaya Swasembada 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 Erajaya Swasembada 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 Erajaya Swasembada Tbk, you can compare the effects of market volatilities on Charoen Pokphand and Erajaya Swasembada 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 Erajaya Swasembada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Erajaya Swasembada.
Diversification Opportunities for Charoen Pokphand and Erajaya Swasembada
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charoen and Erajaya is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Indonesia and Erajaya Swasembada Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erajaya Swasembada 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 Erajaya Swasembada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erajaya Swasembada Tbk has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Erajaya Swasembada go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Erajaya Swasembada
Assuming the 90 days trading horizon Charoen Pokphand Indonesia is expected to generate 0.79 times more return on investment than Erajaya Swasembada. However, Charoen Pokphand Indonesia is 1.27 times less risky than Erajaya Swasembada. It trades about 0.01 of its potential returns per unit of risk. Erajaya Swasembada Tbk is currently generating about 0.01 per unit of risk. If you would invest 456,683 in Charoen Pokphand Indonesia on August 31, 2024 and sell it today you would earn a total of 17,317 from holding Charoen Pokphand Indonesia or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Charoen Pokphand Indonesia vs. Erajaya Swasembada Tbk
Performance |
| Timeline |
| Charoen Pokphand Ind |
| Erajaya Swasembada Tbk |
Charoen Pokphand and Erajaya Swasembada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Erajaya Swasembada
The main advantage of trading using opposite Charoen Pokphand and Erajaya Swasembada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Erajaya Swasembada 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 Erajaya Swasembada will offset losses from the drop in Erajaya Swasembada's long position.| Charoen Pokphand vs. Indofood Cbp Sukses | Charoen Pokphand vs. Bank BRISyariah Tbk | Charoen Pokphand vs. Mitra Pinasthika Mustika | Charoen Pokphand vs. Jakarta Int Hotels |
| Erajaya Swasembada vs. Multipolar Tbk | Erajaya Swasembada vs. Astra Graphia Tbk | Erajaya Swasembada vs. Matahari Putra Prima | Erajaya Swasembada vs. Ramayana Lestari Sentosa |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |