Correlation Between Charoen Pokphand and Mapfre SA
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Mapfre SA 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 Mapfre SA 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 Mapfre SA, you can compare the effects of market volatilities on Charoen Pokphand and Mapfre SA 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 Mapfre SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Mapfre SA.
Diversification Opportunities for Charoen Pokphand and Mapfre SA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charoen and Mapfre is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Mapfre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapfre 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 Mapfre SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapfre SA has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Mapfre SA go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Mapfre SA
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to under-perform the Mapfre SA. In addition to that, Charoen Pokphand is 2.48 times more volatile than Mapfre SA. It trades about -0.02 of its total potential returns per unit of risk. Mapfre SA is currently generating about 0.12 per unit of volatility. If you would invest 251.00 in Mapfre SA on October 22, 2024 and sell it today you would earn a total of 15.00 from holding Mapfre SA or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.44% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Mapfre SA
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Mapfre SA |
Charoen Pokphand and Mapfre SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Mapfre SA
The main advantage of trading using opposite Charoen Pokphand and Mapfre SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Mapfre SA 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 Mapfre SA will offset losses from the drop in Mapfre SA's long position.| Charoen Pokphand vs. SANOK RUBBER ZY | Charoen Pokphand vs. SOUTHWEST AIRLINES | Charoen Pokphand vs. Singapore Airlines Limited | Charoen Pokphand vs. Materialise NV |
| Mapfre SA vs. MGIC INVESTMENT | Mapfre SA vs. Guangdong Investment Limited | Mapfre SA vs. NTG Nordic Transport | Mapfre SA vs. Madison Square Garden |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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