Correlation Between HOCHSCHILD MINING and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both HOCHSCHILD MINING 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 HOCHSCHILD MINING and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOCHSCHILD MINING and Charoen Pokphand Foods, you can compare the effects of market volatilities on HOCHSCHILD MINING 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 HOCHSCHILD MINING with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOCHSCHILD MINING and Charoen Pokphand.
Diversification Opportunities for HOCHSCHILD MINING and Charoen Pokphand
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HOCHSCHILD and Charoen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding HOCHSCHILD MINING 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 HOCHSCHILD MINING 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 HOCHSCHILD MINING 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 HOCHSCHILD MINING i.e., HOCHSCHILD MINING and Charoen Pokphand go up and down completely randomly.
Pair Corralation between HOCHSCHILD MINING and Charoen Pokphand
Assuming the 90 days trading horizon HOCHSCHILD MINING is expected to under-perform the Charoen Pokphand. But the stock apears to be less risky and, when comparing its historical volatility, HOCHSCHILD MINING is 1.04 times less risky than Charoen Pokphand. The stock trades about -0.03 of its potential returns per unit of risk. The Charoen Pokphand Foods is currently generating about -0.03 of returns per unit of risk over similar time horizon. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HOCHSCHILD MINING vs. Charoen Pokphand Foods
Performance |
| Timeline |
| HOCHSCHILD MINING |
| Charoen Pokphand Foods |
HOCHSCHILD MINING and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HOCHSCHILD MINING and Charoen Pokphand
The main advantage of trading using opposite HOCHSCHILD MINING and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOCHSCHILD MINING 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.| HOCHSCHILD MINING vs. Gruppo Mutuionline SpA | HOCHSCHILD MINING vs. STRAYER EDUCATION | HOCHSCHILD MINING vs. American Public Education | HOCHSCHILD MINING vs. CHINA EDUCATION GROUP |
| Charoen Pokphand vs. NetSol Technologies | Charoen Pokphand vs. Sporttotal AG | Charoen Pokphand vs. Amkor Technology | Charoen Pokphand vs. Playtech plc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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