Correlation Between Victory New and CKM Building
Can any of the company-specific risk be diversified away by investing in both Victory New and CKM Building 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 Victory New and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory New Materials and CKM Building Material, you can compare the effects of market volatilities on Victory New and CKM Building 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 Victory New with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory New and CKM Building.
Diversification Opportunities for Victory New and CKM Building
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Victory and CKM is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Victory New Materials and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material and Victory New 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 Victory New Materials are associated (or correlated) with CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Victory New i.e., Victory New and CKM Building go up and down completely randomly.
Pair Corralation between Victory New and CKM Building
Assuming the 90 days trading horizon Victory New Materials is expected to under-perform the CKM Building. But the stock apears to be less risky and, when comparing its historical volatility, Victory New Materials is 1.63 times less risky than CKM Building. The stock trades about -0.02 of its potential returns per unit of risk. The CKM Building Material is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,572 in CKM Building Material on November 19, 2024 and sell it today you would earn a total of 2,078 from holding CKM Building Material or generate 132.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Victory New Materials vs. CKM Building Material
Performance |
| Timeline |
| Victory New Materials |
| CKM Building Material |
Victory New and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory New and CKM Building
The main advantage of trading using opposite Victory New and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory New position performs unexpectedly, CKM Building 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 CKM Building will offset losses from the drop in CKM Building's long position.| Victory New vs. Jinli Group Holdings | Victory New vs. New Palace International | Victory New vs. Les Enphants Co | Victory New vs. Shin Shin Co |
| CKM Building vs. Asia Metal Industries | CKM Building vs. Compal Broadband Networks | CKM Building vs. Healthconn Corp | CKM Building vs. Louisa Professional Coffee |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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