Correlation Between Powertech Industrial and CKM Building
Can any of the company-specific risk be diversified away by investing in both Powertech Industrial 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 Powertech Industrial and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powertech Industrial Co and CKM Building Material, you can compare the effects of market volatilities on Powertech Industrial 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 Powertech Industrial with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powertech Industrial and CKM Building.
Diversification Opportunities for Powertech Industrial and CKM Building
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Powertech and CKM is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Powertech Industrial 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 Powertech Industrial 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 Powertech Industrial 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 Powertech Industrial i.e., Powertech Industrial and CKM Building go up and down completely randomly.
Pair Corralation between Powertech Industrial and CKM Building
Assuming the 90 days trading horizon Powertech Industrial Co is expected to generate 2.19 times more return on investment than CKM Building. However, Powertech Industrial is 2.19 times more volatile than CKM Building Material. It trades about 0.21 of its potential returns per unit of risk. CKM Building Material is currently generating about -0.12 per unit of risk. If you would invest 2,650 in Powertech Industrial Co on August 30, 2024 and sell it today you would earn a total of 355.00 from holding Powertech Industrial Co or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Powertech Industrial Co vs. CKM Building Material
Performance |
| Timeline |
| Powertech Industrial |
| CKM Building Material |
Powertech Industrial and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powertech Industrial and CKM Building
The main advantage of trading using opposite Powertech Industrial and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powertech Industrial 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.| Powertech Industrial vs. Yulon Motor Co | Powertech Industrial vs. Far Eastern Department | Powertech Industrial vs. China Steel Corp | Powertech Industrial vs. Chang Hwa Commercial |
| CKM Building vs. Genovate Biotechnology Co | CKM Building vs. Medigen Biotechnology | CKM Building vs. Posiflex Technology | CKM Building vs. GeneFerm Biotechnology 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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