Correlation Between Charoen Pokphand and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Geely Automobile 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 Geely Automobile 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 Geely Automobile Holdings, you can compare the effects of market volatilities on Charoen Pokphand and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Geely Automobile.
Diversification Opportunities for Charoen Pokphand and Geely Automobile
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Charoen and Geely is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Geely Automobile go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Geely Automobile
Assuming the 90 days trading horizon Charoen Pokphand is expected to generate 3.79 times less return on investment than Geely Automobile. In addition to that, Charoen Pokphand is 1.05 times more volatile than Geely Automobile Holdings. It trades about 0.02 of its total potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.07 per unit of volatility. If you would invest 94.00 in Geely Automobile Holdings on September 14, 2024 and sell it today you would earn a total of 100.00 from holding Geely Automobile Holdings or generate 106.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Geely Automobile Holdings
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Geely Automobile Holdings |
Charoen Pokphand and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Geely Automobile
The main advantage of trading using opposite Charoen Pokphand and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Charoen Pokphand vs. Alaska Air Group | Charoen Pokphand vs. Westinghouse Air Brake | Charoen Pokphand vs. Wizz Air Holdings | Charoen Pokphand vs. NORWEGIAN AIR SHUT |
| Geely Automobile vs. BYD Company Limited | Geely Automobile vs. MERCEDES BENZ GRP ADR14 | Geely Automobile vs. Superior Plus Corp | Geely Automobile vs. SIVERS SEMICONDUCTORS AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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