Correlation Between Charoen Pokphand and Amazon
Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on Charoen Pokphand and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and Amazon.
Diversification Opportunities for Charoen Pokphand and Amazon
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Charoen and Amazon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and Amazon go up and down completely randomly.
Pair Corralation between Charoen Pokphand and Amazon
If you would invest 65.00 in Charoen Pokphand Foods on January 24, 2024 and sell it today you would earn a total of 0.00 from holding Charoen Pokphand Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 5.0% |
| Values | Daily Returns |
Charoen Pokphand Foods vs. Amazon Inc
Performance |
| Timeline |
| Charoen Pokphand Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Amazon Inc |
Charoen Pokphand and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charoen Pokphand and Amazon
The main advantage of trading using opposite Charoen Pokphand and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charoen Pokphand position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Charoen Pokphand vs. Hooker Furniture | Charoen Pokphand vs. SL Green Realty | Charoen Pokphand vs. United Homes Group | Charoen Pokphand vs. Alvotech |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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