Correlation Between Charoen Pokphand and Fast Food
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Fast Food 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 Fast Food 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 Fast Food Indonesia, you can compare the effects of market volatilities on Charoen Pokphand and Fast Food 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 Fast Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Fast Food.
Diversification Opportunities for Charoen Pokphand and Fast Food
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charoen and Fast is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Indonesia and Fast Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Food Indonesia 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 Fast Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Food Indonesia has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Fast Food go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Fast Food
Assuming the 90 days trading horizon Charoen Pokphand Indonesia is expected to generate 0.74 times more return on investment than Fast Food. However, Charoen Pokphand Indonesia is 1.35 times less risky than Fast Food. It trades about 0.0 of its potential returns per unit of risk. Fast Food Indonesia is currently generating about -0.08 per unit of risk. If you would invest 487,910 in Charoen Pokphand Indonesia on August 31, 2024 and sell it today you would lose (18,910) from holding Charoen Pokphand Indonesia or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Charoen Pokphand Indonesia vs. Fast Food Indonesia
Performance |
| Timeline |
| Charoen Pokphand Ind |
| Fast Food Indonesia |
Charoen Pokphand and Fast Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Fast Food
The main advantage of trading using opposite Charoen Pokphand and Fast Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Fast Food 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 Fast Food will offset losses from the drop in Fast Food'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 |
| Fast Food vs. Japfa Comfeed Indonesia | Fast Food vs. Charoen Pokphand Indonesia | Fast Food vs. Erajaya Swasembada Tbk | Fast Food 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |