Correlation Between Charoen Pokphand and SCB X

Can any of the company-specific risk be diversified away by investing in both Charoen Pokphand and SCB X 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 SCB X 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 SCB X Public, you can compare the effects of market volatilities on Charoen Pokphand and SCB X 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 SCB X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charoen Pokphand and SCB X.

Diversification Opportunities for Charoen Pokphand and SCB X

0.28

Correlation Coefficient

Charoen Pokphand  SCB X

Modest diversification

The 3 months correlation between Charoen and SCB is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Charoen Pokphand Foods and SCB X Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCB X Public 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 SCB X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCB X Public has no effect on the direction of Charoen Pokphand i.e., Charoen Pokphand and SCB X go up and down completely randomly.

Pair Corralation between Charoen Pokphand and SCB X

Assuming the 90 days trading horizon Charoen Pokphand Foods is expected to under-perform the SCB X. In addition to that, Charoen Pokphand is 2.07 times more volatile than SCB X Public. It trades about -0.04 of its total potential returns per unit of risk. SCB X Public is currently generating about 0.13 per unit of volatility. If you would invest  11,200  in SCB X Public on April 22, 2025 and sell it today you would earn a total of  900.00  from holding SCB X Public or generate 8.04% return on investment over 90 days.

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

Charoen Pokphand Foods  vs.  SCB X Public

Charoen Pokphand Foods

Risk-Adjusted Performance

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 somewhat strong fundamental drivers, Charoen Pokphand is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SCB X Public

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SCB X Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, SCB X may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Charoen Pokphand and SCB X

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

The idea behind Charoen Pokphand Foods and SCB X Public 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.