Correlation Between O Bank and CKM Building
Can any of the company-specific risk be diversified away by investing in both O Bank 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 O Bank and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between O Bank Co and CKM Building Material, you can compare the effects of market volatilities on O Bank 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 O Bank with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of O Bank and CKM Building.
Diversification Opportunities for O Bank and CKM Building
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 2897 and CKM is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding O Bank Co 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 O Bank 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 O Bank Co 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 O Bank i.e., O Bank and CKM Building go up and down completely randomly.
Pair Corralation between O Bank and CKM Building
Assuming the 90 days trading horizon O Bank is expected to generate 16.19 times less return on investment than CKM Building. But when comparing it to its historical volatility, O Bank Co is 2.71 times less risky than CKM Building. It trades about 0.01 of its potential returns per unit of risk. CKM Building Material is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,515 in CKM Building Material on October 26, 2024 and sell it today you would earn a total of 80.00 from holding CKM Building Material or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
O Bank Co vs. CKM Building Material
Performance |
| Timeline |
| O Bank |
| CKM Building Material |
O Bank and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with O Bank and CKM Building
The main advantage of trading using opposite O Bank and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O Bank 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.| O Bank vs. Taichung Commercial Bank | O Bank vs. Taishin Financial Holding | O Bank vs. Taiwan Business Bank | O Bank vs. Hua Nan Financial |
| CKM Building vs. Farglory FTZ Investment | CKM Building vs. Elitegroup Computer Systems | CKM Building vs. WinMate Communication INC | CKM Building vs. Mercuries Life Insurance |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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