Correlation Between Charoen Pokphand and HF FOODS
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and HF FOODS 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 HF FOODS 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 HF FOODS GRP, you can compare the effects of market volatilities on Charoen Pokphand and HF FOODS 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 HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and HF FOODS.
Diversification Opportunities for Charoen Pokphand and HF FOODS
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Charoen and 3GX is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP 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 HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and HF FOODS go up and down completely randomly.
Pair Corralation between Charoen Pokphand and HF FOODS
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 1.15 times more return on investment than HF FOODS. However, Charoen Pokphand is 1.15 times more volatile than HF FOODS GRP. It trades about 0.02 of its potential returns per unit of risk. HF FOODS GRP is currently generating about -0.49 per unit of risk. If you would invest 62.00 in Charoen Pokphand Foods on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Charoen Pokphand Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. HF FOODS GRP
Performance |
| Timeline |
| Charoen Pokphand Foods |
| HF FOODS GRP |
Charoen Pokphand and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and HF FOODS
The main advantage of trading using opposite Charoen Pokphand and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, HF FOODS 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| Charoen Pokphand vs. Dalata Hotel Group | Charoen Pokphand vs. Algonquin Power Utilities | Charoen Pokphand vs. Emperor Entertainment Hotel | Charoen Pokphand vs. DALATA HOTEL |
| HF FOODS vs. Playtech plc | HF FOODS vs. Playa Hotels Resorts | HF FOODS vs. SLIGRO FOOD GROUP | HF FOODS vs. Nomad Foods |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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