Correlation Between Geely Automobile and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Charoen Pokphand Foods, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Charoen Pokphand.
Diversification Opportunities for Geely Automobile and Charoen Pokphand
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Geely and Charoen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings 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 Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Geely Automobile and Charoen Pokphand
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 1.48 times more return on investment than Charoen Pokphand. However, Geely Automobile is 1.48 times more volatile than Charoen Pokphand Foods. It trades about 0.17 of its potential returns per unit of risk. Charoen Pokphand Foods is currently generating about 0.0 per unit of risk. If you would invest 151.00 in Geely Automobile Holdings on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Geely Automobile Holdings or generate 26.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Geely Automobile Holdings |
| Charoen Pokphand Foods |
Geely Automobile and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Charoen Pokphand
The main advantage of trading using opposite Geely Automobile and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. Focus Home Interactive | Geely Automobile vs. Haier Smart Home | Geely Automobile vs. Haverty Furniture Companies | Geely Automobile vs. Broadridge Financial Solutions |
| Charoen Pokphand vs. Tyson Foods | Charoen Pokphand vs. Mowi ASA | Charoen Pokphand vs. SalMar ASA | Charoen Pokphand vs. Superior Plus Corp |
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.
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