Correlation Between PT Gudang and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both PT Gudang and Charoen Pokphand 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 PT Gudang and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Gudang Garam and Charoen Pokphand Foods, you can compare the effects of market volatilities on PT Gudang and Charoen Pokphand 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 PT Gudang with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Gudang and Charoen Pokphand.
Diversification Opportunities for PT Gudang and Charoen Pokphand
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GGG and Charoen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PT Gudang Garam and Charoen Pokphand Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Foods and PT Gudang 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 PT Gudang Garam are associated (or correlated) with Charoen Pokphand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charoen Pokphand Foods has no effect on the direction of PT Gudang i.e., PT Gudang and Charoen Pokphand go up and down completely randomly.
Pair Corralation between PT Gudang and Charoen Pokphand
Assuming the 90 days horizon PT Gudang Garam is expected to under-perform the Charoen Pokphand. In addition to that, PT Gudang is 4.51 times more volatile than Charoen Pokphand Foods. It trades about -0.04 of its total potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.11 per unit of volatility. If you would invest 66.00 in Charoen Pokphand Foods on September 1, 2024 and sell it today you would lose (2.00) from holding Charoen Pokphand Foods or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Gudang Garam vs. Charoen Pokphand Foods
Performance |
| Timeline |
| PT Gudang Garam |
| Charoen Pokphand Foods |
PT Gudang and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Gudang and Charoen Pokphand
The main advantage of trading using opposite PT Gudang and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Gudang position performs unexpectedly, Charoen Pokphand 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 Charoen Pokphand will offset losses from the drop in Charoen Pokphand's long position.| PT Gudang vs. Chiba Bank | PT Gudang vs. Heartland Financial USA | PT Gudang vs. Pebblebrook Hotel Trust | PT Gudang vs. Playa Hotels Resorts |
| Charoen Pokphand vs. Charoen Pokphand Foods | Charoen Pokphand vs. KRUNG THAI FGN | Charoen Pokphand vs. PT Gudang Garam | Charoen Pokphand vs. TMBThanachart Bank Public |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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