Correlation Between Charoen Pokphand and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Lerøy Seafood 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 Lerøy Seafood 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 Lery Seafood Group, you can compare the effects of market volatilities on Charoen Pokphand and Lerøy Seafood 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 Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Lerøy Seafood.
Diversification Opportunities for Charoen Pokphand and Lerøy Seafood
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Charoen and Lerøy is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Lerøy Seafood go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Lerøy Seafood
Assuming the 90 days trading horizon Charoen Pokphand is expected to generate 10.5 times less return on investment than Lerøy Seafood. But when comparing it to its historical volatility, Charoen Pokphand Foods is 2.78 times less risky than Lerøy Seafood. It trades about 0.02 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Lery Seafood Group on September 14, 2024 and sell it today you would earn a total of 342.00 from holding Lery Seafood Group or generate 371.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Lery Seafood Group
Performance |
| Timeline |
| Charoen Pokphand Foods |
| Lery Seafood Group |
Charoen Pokphand and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Lerøy Seafood
The main advantage of trading using opposite Charoen Pokphand and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Lerøy Seafood 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 Lerøy Seafood will offset losses from the drop in Lerøy Seafood'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 |
| Lerøy Seafood vs. Hormel Foods | Lerøy Seafood vs. Superior Plus Corp | Lerøy Seafood vs. SIVERS SEMICONDUCTORS AB | Lerøy Seafood vs. NorAm Drilling AS |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |