Correlation Between Interlink Telecom and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Interlink Telecom 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 Interlink Telecom and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlink Telecom Public and Charoen Pokphand Foods, you can compare the effects of market volatilities on Interlink Telecom 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 Interlink Telecom with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlink Telecom and Charoen Pokphand.
Diversification Opportunities for Interlink Telecom and Charoen Pokphand
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Interlink and Charoen is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Telecom Public 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 Interlink Telecom 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 Interlink Telecom Public 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 Interlink Telecom i.e., Interlink Telecom and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Interlink Telecom and Charoen Pokphand
Assuming the 90 days trading horizon Interlink Telecom Public is expected to under-perform the Charoen Pokphand. In addition to that, Interlink Telecom is 2.22 times more volatile than Charoen Pokphand Foods. It trades about -0.14 of its total potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.08 per unit of volatility. If you would invest 2,440 in Charoen Pokphand Foods on September 3, 2024 and sell it today you would lose (50.00) from holding Charoen Pokphand Foods or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interlink Telecom Public vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Interlink Telecom Public |
| Charoen Pokphand Foods |
Interlink Telecom and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlink Telecom and Charoen Pokphand
The main advantage of trading using opposite Interlink Telecom and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlink Telecom 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.| Interlink Telecom vs. Interlink Communication Public | Interlink Telecom vs. Jay Mart Public | Interlink Telecom vs. Internet Thailand Public | Interlink Telecom vs. Jasmine International 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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