Correlation Between Charoen Pokphand and Voya Financial
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Voya Financial 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 Voya Financial 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 Voya Financial, you can compare the effects of market volatilities on Charoen Pokphand and Voya Financial 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 Voya Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Voya Financial.
Diversification Opportunities for Charoen Pokphand and Voya Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Charoen and Voya is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Financial 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 Voya Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Financial has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Voya Financial go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Voya Financial
Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to under-perform the Voya Financial. But the stock apears to be less risky and, when comparing its historical volatility, Charoen Pokphand Foods is 1.01 times less risky than Voya Financial. The stock trades about -0.02 of its potential returns per unit of risk. The Voya Financial is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 6,810 in Voya Financial on September 20, 2024 and sell it today you would lose (210.00) from holding Voya Financial or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Voya Financial
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Voya Financial |
Charoen Pokphand and Voya Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Voya Financial
The main advantage of trading using opposite Charoen Pokphand and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Voya Financial 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 Voya Financial will offset losses from the drop in Voya Financial's long position.| Charoen Pokphand vs. Tyson Foods | Charoen Pokphand vs. Mowi ASA | Charoen Pokphand vs. SalMar ASA | Charoen Pokphand vs. Superior Plus Corp |
| Voya Financial vs. Ebro Foods SA | Voya Financial vs. TYSON FOODS A | Voya Financial vs. PARKEN Sport Entertainment | Voya Financial vs. Kaiser Aluminum |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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