Correlation Between CNH and Kortek
Can any of the company-specific risk be diversified away by investing in both CNH and Kortek 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 CNH and Kortek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNH Co and Kortek, you can compare the effects of market volatilities on CNH and Kortek 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 CNH with a short position of Kortek. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH and Kortek.
Diversification Opportunities for CNH and Kortek
Very weak diversification
The 3 months correlation between CNH and Kortek is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CNH Co and Kortek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kortek and CNH 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 CNH Co are associated (or correlated) with Kortek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kortek has no effect on the direction of CNH i.e., CNH and Kortek go up and down completely randomly.
Pair Corralation between CNH and Kortek
If you would invest 10,900 in CNH Co on September 2, 2024 and sell it today you would earn a total of 0.00 from holding CNH Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 9.09% |
| Values | Daily Returns |
CNH Co vs. Kortek
Performance |
| Timeline |
| CNH Co |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kortek |
CNH and Kortek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH and Kortek
The main advantage of trading using opposite CNH and Kortek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH position performs unexpectedly, Kortek 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 Kortek will offset losses from the drop in Kortek's long position.The idea behind CNH Co and Kortek 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.| Kortek vs. Korea Computer Terminal | Kortek vs. Atec Co | Kortek vs. Korea Information Engineering | Kortek vs. Haesung Optics 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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