Correlation Between Thanachart Capital and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Thanachart Capital and Charoen Pokphand 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 Thanachart Capital and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thanachart Capital Public and Charoen Pokphand Foods, you can compare the effects of market volatilities on Thanachart Capital and Charoen Pokphand 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 Thanachart Capital with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thanachart Capital and Charoen Pokphand.
Diversification Opportunities for Thanachart Capital and Charoen Pokphand
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thanachart and Charoen is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Thanachart Capital Public and Charoen Pokphand Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charoen Pokphand Foods and Thanachart Capital 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 Thanachart Capital Public are associated (or correlated) with Charoen Pokphand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charoen Pokphand Foods has no effect on the direction of Thanachart Capital i.e., Thanachart Capital and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Thanachart Capital and Charoen Pokphand
Assuming the 90 days trading horizon Thanachart Capital Public is expected to under-perform the Charoen Pokphand. But the stock apears to be less risky and, when comparing its historical volatility, Thanachart Capital Public is 1.03 times less risky than Charoen Pokphand. The stock trades about -0.25 of its potential returns per unit of risk. The Charoen Pokphand Foods is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Charoen Pokphand Foods on August 30, 2024 and sell it today you would lose (100.00) from holding Charoen Pokphand Foods or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Thanachart Capital Public vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Thanachart Capital Public |
| Charoen Pokphand Foods |
Thanachart Capital and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thanachart Capital and Charoen Pokphand
The main advantage of trading using opposite Thanachart Capital and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thanachart Capital position performs unexpectedly, Charoen Pokphand 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 Charoen Pokphand will offset losses from the drop in Charoen Pokphand's long position.| Thanachart Capital vs. TISCO Financial Group | Thanachart Capital vs. Kiatnakin Phatra Bank | Thanachart Capital vs. SCB X Public | Thanachart Capital vs. Kasikornbank Public |
| Charoen Pokphand vs. CP ALL Public | Charoen Pokphand vs. PTT Public | Charoen Pokphand vs. Bangkok Bank Public | Charoen Pokphand vs. SCB X Public |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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