Correlation Between NH Investment and CKH Food
Can any of the company-specific risk be diversified away by investing in both NH Investment 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 NH Investment and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Investment Securities and CKH Food Health, you can compare the effects of market volatilities on NH Investment 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 NH Investment with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and CKH Food.
Diversification Opportunities for NH Investment and CKH Food
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005940 and CKH is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities 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 NH Investment 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 NH Investment Securities 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 NH Investment i.e., NH Investment and CKH Food go up and down completely randomly.
Pair Corralation between NH Investment and CKH Food
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.43 times more return on investment than CKH Food. However, NH Investment Securities is 2.33 times less risky than CKH Food. It trades about 0.0 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.08 per unit of risk. If you would invest 1,422,000 in NH Investment Securities on October 24, 2024 and sell it today you would lose (2,000) from holding NH Investment Securities or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. CKH Food Health
Performance |
| Timeline |
| NH Investment Securities |
| CKH Food Health |
NH Investment and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and CKH Food
The main advantage of trading using opposite NH Investment and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment 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.| NH Investment vs. Seoul Food Industrial | NH Investment vs. Pyung Hwa Industrial | NH Investment vs. Samyang Foods Co | NH Investment vs. Korea Shipbuilding Offshore |
| CKH Food vs. UJU Electronics Co | CKH Food vs. Stic Investments | CKH Food vs. Sungmoon Electronics Co | CKH Food vs. Shinil Electronics 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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