Correlation Between DAEDUCK ELECTRONICS and CKH Food
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEDUCK ELECTRONICS CoLtd and CKH Food Health, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and CKH Food.
Diversification Opportunities for DAEDUCK ELECTRONICS and CKH Food
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAEDUCK and CKH is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and CKH Food go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and CKH Food
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 0.5 times more return on investment than CKH Food. However, DAEDUCK ELECTRONICS CoLtd is 1.99 times less risky than CKH Food. It trades about -0.02 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.06 per unit of risk. If you would invest 1,044,243 in DAEDUCK ELECTRONICS CoLtd on October 30, 2024 and sell it today you would lose (203,243) from holding DAEDUCK ELECTRONICS CoLtd or give up 19.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. CKH Food Health
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| CKH Food Health |
DAEDUCK ELECTRONICS and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and CKH Food
The main advantage of trading using opposite DAEDUCK ELECTRONICS and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS 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.| DAEDUCK ELECTRONICS vs. SK IE Technology | DAEDUCK ELECTRONICS vs. Solus Advanced Materials | DAEDUCK ELECTRONICS vs. Iljin Display | DAEDUCK ELECTRONICS vs. Sungmoon Electronics Co |
| CKH Food vs. SAMG Entertainment Co | CKH Food vs. SK Chemicals Co | CKH Food vs. Barunson Entertainment Arts | CKH Food vs. SM Entertainment 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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