Correlation Between Charoen Pokphand and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and CN MODERN 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 Charoen Pokphand and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charoen Pokphand Foods and CN MODERN DAIRY, you can compare the effects of market volatilities on Charoen Pokphand and CN MODERN 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 Charoen Pokphand with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and CN MODERN.
Diversification Opportunities for Charoen Pokphand and CN MODERN
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charoen and 07M is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY and Charoen Pokphand 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 Charoen Pokphand Foods are associated (or correlated) with CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and CN MODERN go up and down completely randomly.
Pair Corralation between Charoen Pokphand and CN MODERN
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 1.36 times more return on investment than CN MODERN. However, Charoen Pokphand is 1.36 times more volatile than CN MODERN DAIRY. It trades about 0.05 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.02 per unit of risk. If you would invest 48.00 in Charoen Pokphand Foods on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Charoen Pokphand Foods or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. CN MODERN DAIRY
Performance |
| Timeline |
| Charoen Pokphand Foods |
| CN MODERN DAIRY |
Charoen Pokphand and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and CN MODERN
The main advantage of trading using opposite Charoen Pokphand and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Charoen Pokphand vs. NetSol Technologies | Charoen Pokphand vs. Sporttotal AG | Charoen Pokphand vs. Amkor Technology | Charoen Pokphand vs. Playtech plc |
| CN MODERN vs. Fast Retailing Co | CN MODERN vs. National Retail Properties | CN MODERN vs. AAC TECHNOLOGHLDGADR | CN MODERN vs. GLG LIFE TECH |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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