Correlation Between PT Charoen and SECURITAS

Can any of the company-specific risk be diversified away by investing in both PT Charoen and SECURITAS 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 PT Charoen and SECURITAS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Charoen Pokphand and SECURITAS B , you can compare the effects of market volatilities on PT Charoen and SECURITAS 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 PT Charoen with a short position of SECURITAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Charoen and SECURITAS.

Diversification Opportunities for PT Charoen and SECURITAS

-0.66

Correlation Coefficient

PT Charoen  SECURITAS

Excellent diversification

The 3 months correlation between 0CP1 and SECURITAS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding PT Charoen Pokphand and SECURITAS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURITAS B and PT Charoen 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 PT Charoen Pokphand are associated (or correlated) with SECURITAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURITAS B has no effect on the direction of PT Charoen i.e., PT Charoen and SECURITAS go up and down completely randomly.

Pair Corralation between PT Charoen and SECURITAS

Assuming the 90 days trading horizon PT Charoen Pokphand is expected to under-perform the SECURITAS. In addition to that, PT Charoen is 1.95 times more volatile than SECURITAS B . It trades about -0.09 of its total potential returns per unit of risk. SECURITAS B is currently generating about 0.13 per unit of volatility. If you would invest  1,190  in SECURITAS B on December 23, 2024 and sell it today you would earn a total of  129.00  from holding SECURITAS B or generate 10.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PT Charoen Pokphand  vs.  SECURITAS B

PT Charoen Pokphand

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Charoen Pokphand has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SECURITAS B

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SECURITAS B are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SECURITAS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PT Charoen and SECURITAS

The main advantage of trading using opposite PT Charoen and SECURITAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Charoen position performs unexpectedly, SECURITAS 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 SECURITAS will offset losses from the drop in SECURITAS's long position.

The idea behind PT Charoen Pokphand and SECURITAS B pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.