Correlation Between FATFISH GROUP and Charoen Pokphand

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

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

Diversification Opportunities for FATFISH GROUP and Charoen Pokphand

0.19

Correlation Coefficient

FATFISH GROUP  Charoen Pokphand

Average diversification

The 3 months correlation between FATFISH and Charoen is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding FATFISH GROUP LTD 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 FATFISH GROUP 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 FATFISH GROUP LTD 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 FATFISH GROUP i.e., FATFISH GROUP and Charoen Pokphand go up and down completely randomly.

Pair Corralation between FATFISH GROUP and Charoen Pokphand

Assuming the 90 days horizon FATFISH GROUP LTD is expected to generate 5.43 times more return on investment than Charoen Pokphand. However, FATFISH GROUP is 5.43 times more volatile than Charoen Pokphand Foods. It trades about 0.09 of its potential returns per unit of risk. Charoen Pokphand Foods is currently generating about 0.03 per unit of risk. If you would invest  0.35  in FATFISH GROUP LTD on September 17, 2024 and sell it today you would earn a total of  0.10  from holding FATFISH GROUP LTD or generate 28.57% return on investment over 90 days.

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

FATFISH GROUP LTD  vs.  Charoen Pokphand Foods

FATFISH GROUP LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FATFISH GROUP LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FATFISH GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Charoen Pokphand Foods

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Charoen Pokphand Foods are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Charoen Pokphand is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FATFISH GROUP and Charoen Pokphand

The main advantage of trading using opposite FATFISH GROUP and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FATFISH GROUP 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.

The idea behind FATFISH GROUP LTD and Charoen Pokphand Foods 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.

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 Stocks Directory module to find actively traded stocks across global markets.