Correlation Between CHP and Corn

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

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

Diversification Opportunities for CHP and Corn

0.08

Correlation Coefficient

CHP  Corn

Significant diversification

The 3 months correlation between CHP and Corn is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CHP and Corn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corn and CHP 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 CHP are associated (or correlated) with Corn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corn has no effect on the direction of CHP i.e., CHP and Corn go up and down completely randomly.

Pair Corralation between CHP and Corn

Assuming the 90 days trading horizon CHP is expected to generate 5.63 times less return on investment than Corn. But when comparing it to its historical volatility, CHP is 2.71 times less risky than Corn. It trades about 0.05 of its potential returns per unit of risk. Corn is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5.88  in Corn on July 18, 2025 and sell it today you would earn a total of  3.05  from holding Corn or generate 51.87% return on investment over 90 days.

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

CHP  vs.  Corn

CHP

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CHP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, CHP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Corn

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Corn are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Corn exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHP and Corn

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

The idea behind CHP and Corn 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.