I have label the plantation stocks approximate lowest level and the peak.
CPO 3 continuous active contract is about 2.5x average from the low of 2000.
One glance, the plantation stocks moved up about 2x to 3x with max 4x the range before CPO peaks.
The question is - Did or Has the stocks prices PEAK before CPO futures peak? what is NEXT?
REMEMBER CPO futures is about SUPPLY - DEMAND of the physical and stocks prices is about company performance or anticipated future performance and confidence.
DID the company stock prices LAGGED versus CPO Futures? or Did the CPO Futures LAGGED the stock prices?
The plantation stocks has moved up ERRATICALLY independently sometimes and coherent in sync other times with each others. Meaning the presumably "assumption that CPO Futures and stocks are positively linear related is nothing but BS".
The ignorant and the denial ones will continue to think and see from the paradigm of Positive Linear Relationship between the CPO futures and the stock prices.
If you ever wonder why Plantation stocks fail to track CPO Futures closely? Well the answer is they are NOT PERFECTLY POSITIVELY correlated with each other!!!
The charts above clearly display the assumption that CPO Futures and stocks are of perfect correlated is WRONG, FAULTY and DENIAL. More aptly put no proper analysis done correctly.
If one is to do a PEARSON statistical analysis, at best my bet is a coefficient of 0.6 (minimum 0 and maximum 1) which I will call it a 60% POSITIVE correlation. The other 40% of the time? Non positive correlation. Or random. Or NEGATIVE.
Even a ANOVA statistical analysis will not be any better.
Let market lead us and see if the CPO futures will come down or the stocks will continue to move on their own independently on their own
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