Correlation Between Dawonsys CoLtd and CKH Food
Can any of the company-specific risk be diversified away by investing in both Dawonsys CoLtd 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 Dawonsys CoLtd and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dawonsys CoLtd and CKH Food Health, you can compare the effects of market volatilities on Dawonsys CoLtd 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 Dawonsys CoLtd with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dawonsys CoLtd and CKH Food.
Diversification Opportunities for Dawonsys CoLtd and CKH Food
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dawonsys and CKH is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dawonsys CoLtd 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 Dawonsys CoLtd 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 Dawonsys CoLtd 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 Dawonsys CoLtd i.e., Dawonsys CoLtd and CKH Food go up and down completely randomly.
Pair Corralation between Dawonsys CoLtd and CKH Food
Assuming the 90 days trading horizon Dawonsys CoLtd is expected to under-perform the CKH Food. But the stock apears to be less risky and, when comparing its historical volatility, Dawonsys CoLtd is 1.13 times less risky than CKH Food. The stock trades about -0.2 of its potential returns per unit of risk. The CKH Food Health is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 7,500 in CKH Food Health on September 13, 2024 and sell it today you would lose (800.00) from holding CKH Food Health or give up 10.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dawonsys CoLtd vs. CKH Food Health
Performance |
| Timeline |
| Dawonsys CoLtd |
| CKH Food Health |
Dawonsys CoLtd and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dawonsys CoLtd and CKH Food
The main advantage of trading using opposite Dawonsys CoLtd and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dawonsys CoLtd 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.| Dawonsys CoLtd vs. Korea New Network | Dawonsys CoLtd vs. Solution Advanced Technology | Dawonsys CoLtd vs. Busan Industrial Co | Dawonsys CoLtd vs. Busan Ind |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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