Correlation Between Charoen Pokphand and Hartadinata Abadi
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Hartadinata Abadi 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 Hartadinata Abadi 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 Hartadinata Abadi Tbk, you can compare the effects of market volatilities on Charoen Pokphand and Hartadinata Abadi 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 Hartadinata Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Hartadinata Abadi.
Diversification Opportunities for Charoen Pokphand and Hartadinata Abadi
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charoen and Hartadinata is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Indonesia and Hartadinata Abadi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartadinata Abadi 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 Hartadinata Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartadinata Abadi Tbk has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Hartadinata Abadi go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Hartadinata Abadi
Assuming the 90 days trading horizon Charoen Pokphand Indonesia is expected to generate 0.82 times more return on investment than Hartadinata Abadi. However, Charoen Pokphand Indonesia is 1.22 times less risky than Hartadinata Abadi. It trades about -0.12 of its potential returns per unit of risk. Hartadinata Abadi Tbk is currently generating about -0.49 per unit of risk. If you would invest 489,000 in Charoen Pokphand Indonesia on September 2, 2024 and sell it today you would lose (20,000) from holding Charoen Pokphand Indonesia or give up 4.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Indonesia vs. Hartadinata Abadi Tbk
Performance |
| Timeline |
| Charoen Pokphand Ind |
| Hartadinata Abadi Tbk |
Charoen Pokphand and Hartadinata Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Hartadinata Abadi
The main advantage of trading using opposite Charoen Pokphand and Hartadinata Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Hartadinata Abadi 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 Hartadinata Abadi will offset losses from the drop in Hartadinata Abadi'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 |
| Hartadinata Abadi vs. Japfa Comfeed Indonesia | Hartadinata Abadi vs. Charoen Pokphand Indonesia | Hartadinata Abadi vs. Erajaya Swasembada Tbk | Hartadinata Abadi 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |