Correlation Between Charoen Pokphand and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and AUST AGRICULTURAL 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 AUST AGRICULTURAL 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 AUST AGRICULTURAL, you can compare the effects of market volatilities on Charoen Pokphand and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and AUST AGRICULTURAL.
Diversification Opportunities for Charoen Pokphand and AUST AGRICULTURAL
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charoen and AUST is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between Charoen Pokphand and AUST AGRICULTURAL
Assuming the 90 days trading horizon Charoen Pokphand is expected to generate 2.29 times less return on investment than AUST AGRICULTURAL. In addition to that, Charoen Pokphand is 2.49 times more volatile than AUST AGRICULTURAL. It trades about 0.02 of its total potential returns per unit of risk. AUST AGRICULTURAL is currently generating about 0.09 per unit of volatility. If you would invest 83.00 in AUST AGRICULTURAL on November 27, 2024 and sell it today you would earn a total of 2.00 from holding AUST AGRICULTURAL or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. AUST AGRICULTURAL
Performance |
| Timeline |
| Charoen Pokphand Foods |
| AUST AGRICULTURAL |
Charoen Pokphand and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and AUST AGRICULTURAL
The main advantage of trading using opposite Charoen Pokphand and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL'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 |
| AUST AGRICULTURAL vs. The Yokohama Rubber | AUST AGRICULTURAL vs. Mitsubishi Materials | AUST AGRICULTURAL vs. APPLIED MATERIALS | AUST AGRICULTURAL vs. Heidelberg Materials AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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