Correlation Between Value Added and CKH Food
Can any of the company-specific risk be diversified away by investing in both Value Added 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 Value Added and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Added Technology and CKH Food Health, you can compare the effects of market volatilities on Value Added 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 Value Added with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Added and CKH Food.
Diversification Opportunities for Value Added and CKH Food
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Value and CKH is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Value Added Technology 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 Value Added 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 Value Added Technology 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 Value Added i.e., Value Added and CKH Food go up and down completely randomly.
Pair Corralation between Value Added and CKH Food
Assuming the 90 days trading horizon Value Added Technology is expected to generate 0.48 times more return on investment than CKH Food. However, Value Added Technology is 2.07 times less risky than CKH Food. It trades about -0.12 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.17 per unit of risk. If you would invest 2,020,000 in Value Added Technology on September 13, 2024 and sell it today you would lose (75,000) from holding Value Added Technology or give up 3.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Added Technology vs. CKH Food Health
Performance |
| Timeline |
| Value Added Technology |
| CKH Food Health |
Value Added and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Added and CKH Food
The main advantage of trading using opposite Value Added and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Added 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.| Value Added vs. Samsung Electronics Co | Value Added vs. Samsung Electronics Co | Value Added vs. SK Hynix | Value Added vs. SK Holdings Co |
| CKH Food vs. Korea New Network | CKH Food vs. ICD Co | CKH Food vs. DYPNF CoLtd | CKH Food vs. Solution Advanced Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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