Correlation Between Haitai Confectionery and CKH Food
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery 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 Haitai Confectionery and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haitai Confectionery Foods and CKH Food Health, you can compare the effects of market volatilities on Haitai Confectionery 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 Haitai Confectionery with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and CKH Food.
Diversification Opportunities for Haitai Confectionery and CKH Food
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Haitai and CKH is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods 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 Haitai Confectionery 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 Haitai Confectionery Foods 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 Haitai Confectionery i.e., Haitai Confectionery and CKH Food go up and down completely randomly.
Pair Corralation between Haitai Confectionery and CKH Food
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 1.18 times more return on investment than CKH Food. However, Haitai Confectionery is 1.18 times more volatile than CKH Food Health. It trades about 0.11 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.19 per unit of risk. If you would invest 580,000 in Haitai Confectionery Foods on August 29, 2024 and sell it today you would earn a total of 26,000 from holding Haitai Confectionery Foods or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. CKH Food Health
Performance |
| Timeline |
| Haitai Confectionery |
| CKH Food Health |
Haitai Confectionery and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and CKH Food
The main advantage of trading using opposite Haitai Confectionery and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery 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.| Haitai Confectionery vs. AptaBio Therapeutics | Haitai Confectionery vs. Daewoo SBI SPAC | Haitai Confectionery vs. Dream Security co | Haitai Confectionery vs. Microfriend |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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