Correlation Between Thai Union and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both Thai Union 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 Thai Union and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Union Group and Charoen Pokphand Foods, you can compare the effects of market volatilities on Thai Union 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 Thai Union with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Union and Charoen Pokphand.
Diversification Opportunities for Thai Union and Charoen Pokphand
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thai and Charoen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thai Union Group 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 Thai Union 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 Thai Union Group 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 Thai Union i.e., Thai Union and Charoen Pokphand go up and down completely randomly.
Pair Corralation between Thai Union and Charoen Pokphand
Assuming the 90 days horizon Thai Union Group is expected to under-perform the Charoen Pokphand. In addition to that, Thai Union is 1.28 times more volatile than Charoen Pokphand Foods. It trades about -0.32 of its total potential returns per unit of risk. Charoen Pokphand Foods is currently generating about -0.03 per unit of volatility. If you would invest 2,470 in Charoen Pokphand Foods on August 28, 2024 and sell it today you would lose (20.00) from holding Charoen Pokphand Foods or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Union Group vs. Charoen Pokphand Foods
Performance |
| Timeline |
| Thai Union Group |
| Charoen Pokphand Foods |
Thai Union and Charoen Pokphand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Union and Charoen Pokphand
The main advantage of trading using opposite Thai Union and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Union 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.| Thai Union vs. Charoen Pokphand Foods | Thai Union vs. CP ALL Public | Thai Union vs. Minor International Public | Thai Union vs. Advanced Info Service |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |