Correlation Between First Copper and CKM Building
Can any of the company-specific risk be diversified away by investing in both First Copper 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 First Copper and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Copper Technology and CKM Building Material, you can compare the effects of market volatilities on First Copper 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 First Copper with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Copper and CKM Building.
Diversification Opportunities for First Copper and CKM Building
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and CKM is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding First Copper Technology 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 First Copper 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 First Copper Technology 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 First Copper i.e., First Copper and CKM Building go up and down completely randomly.
Pair Corralation between First Copper and CKM Building
Assuming the 90 days trading horizon First Copper is expected to generate 3.44 times less return on investment than CKM Building. In addition to that, First Copper is 1.1 times more volatile than CKM Building Material. It trades about 0.02 of its total potential returns per unit of risk. CKM Building Material is currently generating about 0.09 per unit of volatility. If you would invest 1,514 in CKM Building Material on October 7, 2024 and sell it today you would earn a total of 1,951 from holding CKM Building Material or generate 128.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Copper Technology vs. CKM Building Material
Performance |
| Timeline |
| First Copper Technology |
| CKM Building Material |
First Copper and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Copper and CKM Building
The main advantage of trading using opposite First Copper and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Copper 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.| First Copper vs. Basso Industry Corp | First Copper vs. Chung Hsin Electric Machinery | First Copper vs. TECO Electric Machinery | First Copper vs. China General Plastics |
| CKM Building vs. Sunspring Metal Corp | CKM Building vs. Buima Group | CKM Building vs. Champion Building Materials |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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