Correlation Between Japfa Comfeed and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Japfa Comfeed 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 Japfa Comfeed and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japfa Comfeed Indonesia and Charoen Pokphand Indonesia, you can compare the effects of market volatilities on Japfa Comfeed 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 Japfa Comfeed with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japfa Comfeed and Charoen Pokphand.
Diversification Opportunities for Japfa Comfeed and Charoen Pokphand
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Japfa and Charoen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Japfa Comfeed Indonesia and Charoen Pokphand Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Ind and Japfa Comfeed 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 Japfa Comfeed Indonesia 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 Ind has no effect on the direction of Japfa Comfeed i.e., Japfa Comfeed and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Japfa Comfeed and Charoen Pokphand
Assuming the 90 days trading horizon Japfa Comfeed Indonesia is expected to generate 1.24 times more return on investment than Charoen Pokphand. However, Japfa Comfeed is 1.24 times more volatile than Charoen Pokphand Indonesia. It trades about 0.08 of its potential returns per unit of risk. Charoen Pokphand Indonesia is currently generating about -0.17 per unit of risk. If you would invest 169,500 in Japfa Comfeed Indonesia on August 25, 2024 and sell it today you would earn a total of 7,000 from holding Japfa Comfeed Indonesia or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japfa Comfeed Indonesia vs. Charoen Pokphand Indonesia
Performance |
| Timeline |
| Japfa Comfeed Indonesia |
| Charoen Pokphand Ind |
Japfa Comfeed and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japfa Comfeed and Charoen Pokphand
The main advantage of trading using opposite Japfa Comfeed and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japfa Comfeed 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.| Japfa Comfeed vs. Charoen Pokphand Indonesia | Japfa Comfeed vs. Kalbe Farma Tbk | Japfa Comfeed vs. Indofood Cbp Sukses | Japfa Comfeed vs. PT Indofood Sukses |
| Charoen Pokphand vs. Japfa Comfeed Indonesia | Charoen Pokphand vs. Kalbe Farma Tbk | Charoen Pokphand vs. PT Indofood Sukses | Charoen Pokphand vs. Semen Indonesia Persero |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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