Correlation Between Korea Electric and CKH Food
Can any of the company-specific risk be diversified away by investing in both Korea Electric 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 Korea Electric and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Electric Power and CKH Food Health, you can compare the effects of market volatilities on Korea Electric 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 Korea Electric with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and CKH Food.
Diversification Opportunities for Korea Electric and CKH Food
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and CKH is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power 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 Korea Electric 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 Korea Electric Power 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 Korea Electric i.e., Korea Electric and CKH Food go up and down completely randomly.
Pair Corralation between Korea Electric and CKH Food
Assuming the 90 days trading horizon Korea Electric Power is expected to generate 0.62 times more return on investment than CKH Food. However, Korea Electric Power is 1.61 times less risky than CKH Food. It trades about 0.03 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.06 per unit of risk. If you would invest 1,980,000 in Korea Electric Power on August 28, 2024 and sell it today you would earn a total of 395,000 from holding Korea Electric Power or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. CKH Food Health
Performance |
| Timeline |
| Korea Electric Power |
| CKH Food Health |
Korea Electric and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and CKH Food
The main advantage of trading using opposite Korea Electric and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric 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.| Korea Electric vs. Sungwoo Electronics Co | Korea Electric vs. Cuckoo Electronics Co | Korea Electric vs. INNOX Advanced Materials | Korea Electric vs. Top Material Co |
| CKH Food vs. AptaBio Therapeutics | CKH Food vs. Daewoo SBI SPAC | CKH Food vs. Dream Security co | CKH Food vs. Microfriend |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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