Correlation Between GREENX METALS and Charoen Pokphand
Can any of the company-specific risk be diversified away by investing in both GREENX METALS 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 GREENX METALS and Charoen Pokphand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and Charoen Pokphand Foods, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of Charoen Pokphand. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and Charoen Pokphand.
Diversification Opportunities for GREENX METALS and Charoen Pokphand
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GREENX and Charoen is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS 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 GREENX METALS 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 GREENX METALS 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 GREENX METALS i.e., GREENX METALS and Charoen Pokphand go up and down completely randomly.
Pair Corralation between GREENX METALS and Charoen Pokphand
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.66 times more return on investment than Charoen Pokphand. However, GREENX METALS is 1.66 times more volatile than Charoen Pokphand Foods. It trades about 0.01 of its potential returns per unit of risk. Charoen Pokphand Foods is currently generating about 0.01 per unit of risk. If you would invest 56.00 in GREENX METALS LTD on September 26, 2024 and sell it today you would lose (16.00) from holding GREENX METALS LTD or give up 28.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GREENX METALS LTD vs. Charoen Pokphand Foods
Performance |
Timeline |
GREENX METALS LTD |
Charoen Pokphand Foods |
GREENX METALS and Charoen Pokphand Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GREENX METALS and Charoen Pokphand
The main advantage of trading using opposite GREENX METALS and Charoen Pokphand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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.GREENX METALS vs. Luckin Coffee | GREENX METALS vs. Applied Materials | GREENX METALS vs. Darden Restaurants | GREENX METALS vs. The Yokohama Rubber |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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