Correlation Between Charoen Pokphand and Huntington Bancshares

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

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

Diversification Opportunities for Charoen Pokphand and Huntington Bancshares

-0.2

Correlation Coefficient

Charoen Pokphand  Huntington Bancshares

Good diversification

The 3 months correlation between Charoen and Huntington is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Huntington Bancshares Incorpor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntington Bancshares and Charoen Pokphand 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 Charoen Pokphand Foods are associated (or correlated) with Huntington Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntington Bancshares has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Huntington Bancshares go up and down completely randomly.

Pair Corralation between Charoen Pokphand and Huntington Bancshares

Assuming the 90 days trading horizon Charoen Pokphand is expected to generate 1.32 times less return on investment than Huntington Bancshares. In addition to that, Charoen Pokphand is 1.9 times more volatile than Huntington Bancshares Incorporated. It trades about 0.05 of its total potential returns per unit of risk. Huntington Bancshares Incorporated is currently generating about 0.12 per unit of volatility. If you would invest  925.00  in Huntington Bancshares Incorporated on October 1, 2024 and sell it today you would earn a total of  664.00  from holding Huntington Bancshares Incorporated or generate 71.78% return on investment over 90 days.

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

Charoen Pokphand Foods  vs.  Huntington Bancshares Incorpor

Charoen Pokphand Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Charoen Pokphand Foods has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Huntington Bancshares

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Bancshares Incorporated are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Huntington Bancshares reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Charoen Pokphand and Huntington Bancshares

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

The idea behind Charoen Pokphand Foods and Huntington Bancshares Incorporated 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.