Correlation Between Charoen Pokphand and Air Products
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Air Products 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 Air Products 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 Air Products and, you can compare the effects of market volatilities on Charoen Pokphand and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Air Products.
Diversification Opportunities for Charoen Pokphand and Air Products
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charoen and Air is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Air Products go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Air Products
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 1.76 times more return on investment than Air Products. However, Charoen Pokphand is 1.76 times more volatile than Air Products and. It trades about 0.05 of its potential returns per unit of risk. Air Products and is currently generating about 0.04 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Air Products and
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Air Products |
Charoen Pokphand and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Air Products
The main advantage of trading using opposite Charoen Pokphand and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Charoen Pokphand vs. NetSol Technologies | Charoen Pokphand vs. Sporttotal AG | Charoen Pokphand vs. Amkor Technology | Charoen Pokphand vs. Playtech plc |
| Air Products vs. MINCO SILVER | Air Products vs. NorAm Drilling AS | Air Products vs. GRIFFIN MINING LTD | Air Products vs. International Consolidated Airlines |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |