Correlation Between Sangsin Energy and CKH Food
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy 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 Sangsin Energy and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsin Energy Display and CKH Food Health, you can compare the effects of market volatilities on Sangsin Energy 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 Sangsin Energy with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and CKH Food.
Diversification Opportunities for Sangsin Energy and CKH Food
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sangsin and CKH is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display 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 Sangsin Energy 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 Sangsin Energy Display 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 Sangsin Energy i.e., Sangsin Energy and CKH Food go up and down completely randomly.
Pair Corralation between Sangsin Energy and CKH Food
Assuming the 90 days trading horizon Sangsin Energy Display is expected to generate 0.96 times more return on investment than CKH Food. However, Sangsin Energy Display is 1.04 times less risky than CKH Food. It trades about -0.04 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 1,655,107 in Sangsin Energy Display on September 3, 2024 and sell it today you would lose (902,107) from holding Sangsin Energy Display or give up 54.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. CKH Food Health
Performance |
| Timeline |
| Sangsin Energy Display |
| CKH Food Health |
Sangsin Energy and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and CKH Food
The main advantage of trading using opposite Sangsin Energy and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy 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.| Sangsin Energy vs. LG Display | Sangsin Energy vs. Hyundai Motor | Sangsin Energy vs. Hyundai Motor Co | Sangsin Energy vs. Hyundai Motor Co |
| CKH Food vs. LG Display | CKH Food vs. Hyundai Motor | CKH Food vs. Hyundai Motor Co | CKH Food vs. Hyundai Motor 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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