Correlation Between Cots Technology and CKH Food
Can any of the company-specific risk be diversified away by investing in both Cots Technology 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 Cots Technology and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cots Technology Co and CKH Food Health, you can compare the effects of market volatilities on Cots Technology 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 Cots Technology with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cots Technology and CKH Food.
Diversification Opportunities for Cots Technology and CKH Food
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cots and CKH is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cots Technology Co 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 Cots Technology 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 Cots Technology Co 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 Cots Technology i.e., Cots Technology and CKH Food go up and down completely randomly.
Pair Corralation between Cots Technology and CKH Food
Assuming the 90 days trading horizon Cots Technology Co is expected to generate 1.55 times more return on investment than CKH Food. However, Cots Technology is 1.55 times more volatile than CKH Food Health. It trades about 0.0 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 2,040,000 in Cots Technology Co on October 13, 2024 and sell it today you would lose (597,000) from holding Cots Technology Co or give up 29.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 71.78% |
| Values | Daily Returns |
Cots Technology Co vs. CKH Food Health
Performance |
| Timeline |
| Cots Technology |
| CKH Food Health |
Cots Technology and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cots Technology and CKH Food
The main advantage of trading using opposite Cots Technology and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cots Technology 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.| Cots Technology vs. RF Materials Co | Cots Technology vs. Phoenix Materials Co | Cots Technology vs. National Plastic Co | Cots Technology vs. Camus Engineering Construction |
| CKH Food vs. FOODWELL Co | CKH Food vs. Homecast CoLtd | CKH Food vs. Samlip General Foods | CKH Food vs. Sam Yang Foods |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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