Correlation Between Hanjin Transportation and CKH Food
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and CKH Food 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 Hanjin Transportation and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and CKH Food Health, you can compare the effects of market volatilities on Hanjin Transportation and CKH Food 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 Hanjin Transportation with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and CKH Food.
Diversification Opportunities for Hanjin Transportation and CKH Food
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanjin and CKH is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and CKH Food Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKH Food Health and Hanjin Transportation 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 Hanjin Transportation Co are associated (or correlated) with CKH Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKH Food Health has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and CKH Food go up and down completely randomly.
Pair Corralation between Hanjin Transportation and CKH Food
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.76 times more return on investment than CKH Food. However, Hanjin Transportation Co is 1.31 times less risky than CKH Food. It trades about 0.02 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.23 per unit of risk. If you would invest 1,900,000 in Hanjin Transportation Co on August 31, 2024 and sell it today you would earn a total of 7,000 from holding Hanjin Transportation Co or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. CKH Food Health
Performance |
| Timeline |
| Hanjin Transportation |
| CKH Food Health |
Hanjin Transportation and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and CKH Food
The main advantage of trading using opposite Hanjin Transportation and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, CKH Food 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 CKH Food will offset losses from the drop in CKH Food's long position.| Hanjin Transportation vs. AptaBio Therapeutics | Hanjin Transportation vs. Daewoo SBI SPAC | Hanjin Transportation vs. Dream Security co | Hanjin Transportation vs. Microfriend |
| CKH Food vs. Korea Real Estate | CKH Food vs. Korea Ratings Co | CKH Food vs. IQuest Co | CKH Food vs. Wonbang Tech Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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