Correlation Between Charoen Pokphand and PT Bank
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and PT Bank 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 PT Bank 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 PT Bank Rakyat, you can compare the effects of market volatilities on Charoen Pokphand and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and PT Bank.
Diversification Opportunities for Charoen Pokphand and PT Bank
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Charoen and BYRA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and PT Bank go up and down completely randomly.
Pair Corralation between Charoen Pokphand and PT Bank
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to generate 0.97 times more return on investment than PT Bank. However, Charoen Pokphand Foods is 1.03 times less risky than PT Bank. It trades about -0.05 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about -0.2 per unit of risk. If you would invest 67.00 in Charoen Pokphand Foods on August 29, 2024 and sell it today you would lose (2.00) from holding Charoen Pokphand Foods or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. PT Bank Rakyat
Performance |
| Timeline |
| Charoen Pokphand Foods |
| PT Bank Rakyat |
Charoen Pokphand and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and PT Bank
The main advantage of trading using opposite Charoen Pokphand and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Charoen Pokphand vs. Penn National Gaming | Charoen Pokphand vs. Games Workshop Group | Charoen Pokphand vs. HOCHSCHILD MINING | Charoen Pokphand vs. ETFS Coffee ETC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |