Correlation Between Charoen Pokphand and AENA SME
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and AENA SME 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 AENA SME 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 AENA SME UNSPADR110, you can compare the effects of market volatilities on Charoen Pokphand and AENA SME 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 AENA SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and AENA SME.
Diversification Opportunities for Charoen Pokphand and AENA SME
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charoen and AENA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and AENA SME UNSPADR110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AENA SME UNSPADR110 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 AENA SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AENA SME UNSPADR110 has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and AENA SME go up and down completely randomly.
Pair Corralation between Charoen Pokphand and AENA SME
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to under-perform the AENA SME. In addition to that, Charoen Pokphand is 1.93 times more volatile than AENA SME UNSPADR110. It trades about -0.09 of its total potential returns per unit of risk. AENA SME UNSPADR110 is currently generating about 0.04 per unit of volatility. If you would invest 1,890 in AENA SME UNSPADR110 on September 22, 2024 and sell it today you would earn a total of 20.00 from holding AENA SME UNSPADR110 or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. AENA SME UNSPADR110
Performance |
| Timeline |
| Charoen Pokphand Foods |
| AENA SME UNSPADR110 |
Charoen Pokphand and AENA SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and AENA SME
The main advantage of trading using opposite Charoen Pokphand and AENA SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, AENA SME 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 AENA SME will offset losses from the drop in AENA SME's long position.| Charoen Pokphand vs. Archer Daniels Midland | Charoen Pokphand vs. Archer Daniels Midland | Charoen Pokphand vs. Tyson Foods | Charoen Pokphand vs. Wilmar International Limited |
| AENA SME vs. Airports of Thailand | AENA SME vs. Airports of Thailand | AENA SME vs. Aena SME SA | AENA SME vs. AerCap Holdings NV |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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