Correlation Between Charoen Pokphand and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and CHINA HUARONG 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 CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charoen Pokphand Foods and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on Charoen Pokphand and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and CHINA HUARONG.
Diversification Opportunities for Charoen Pokphand and CHINA HUARONG
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charoen and CHINA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 Foods are associated (or correlated) with CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and CHINA HUARONG go up and down completely randomly.
Pair Corralation between Charoen Pokphand and CHINA HUARONG
If you would invest 62.00 in Charoen Pokphand Foods on December 1, 2024 and sell it today you would earn a total of 4.00 from holding Charoen Pokphand Foods or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| Charoen Pokphand Foods |
| CHINA HUARONG ENERHD |
Charoen Pokphand and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and CHINA HUARONG
The main advantage of trading using opposite Charoen Pokphand and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| Charoen Pokphand vs. Charoen Pokphand Foods | Charoen Pokphand vs. KRUNG THAI FGN | Charoen Pokphand vs. PT Gudang Garam | Charoen Pokphand vs. TMBThanachart Bank Public |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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