Correlation Between Charoen Pokphand and INTER CARS
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and INTER CARS 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 INTER CARS 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 INTER CARS SA, you can compare the effects of market volatilities on Charoen Pokphand and INTER CARS 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 INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and INTER CARS.
Diversification Opportunities for Charoen Pokphand and INTER CARS
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Charoen and INTER is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA 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 INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and INTER CARS go up and down completely randomly.
Pair Corralation between Charoen Pokphand and INTER CARS
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 0.99 times more return on investment than INTER CARS. However, Charoen Pokphand Foods is 1.01 times less risky than INTER CARS. It trades about 0.28 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.01 per unit of risk. If you would invest 58.00 in Charoen Pokphand Foods on December 4, 2024 and sell it today you would earn a total of 8.00 from holding Charoen Pokphand Foods or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. INTER CARS SA
Performance |
| Timeline |
| Charoen Pokphand Foods |
| INTER CARS SA |
Charoen Pokphand and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and INTER CARS
The main advantage of trading using opposite Charoen Pokphand and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, INTER CARS 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 INTER CARS will offset losses from the drop in INTER CARS's long position.| Charoen Pokphand vs. AGNC Investment Corp | Charoen Pokphand vs. MidCap Financial Investment | Charoen Pokphand vs. Live Nation Entertainment | Charoen Pokphand vs. Prosiebensat 1 Media |
| INTER CARS vs. PLAYMATES TOYS | INTER CARS vs. Boyd Gaming | INTER CARS vs. Salesforce | INTER CARS vs. SALESFORCE INC CDR |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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