Correlation Between Buima and CKM Building
Can any of the company-specific risk be diversified away by investing in both Buima 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 Buima and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buima Group and CKM Building Material, you can compare the effects of market volatilities on Buima 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 Buima with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buima and CKM Building.
Diversification Opportunities for Buima and CKM Building
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Buima and CKM is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Buima Group 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 Buima 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 Buima Group 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 Buima i.e., Buima and CKM Building go up and down completely randomly.
Pair Corralation between Buima and CKM Building
Assuming the 90 days trading horizon Buima Group is expected to under-perform the CKM Building. In addition to that, Buima is 1.22 times more volatile than CKM Building Material. It trades about -0.06 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 1,523 in CKM Building Material on October 9, 2024 and sell it today you would earn a total of 2,002 from holding CKM Building Material or generate 131.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buima Group vs. CKM Building Material
Performance |
| Timeline |
| Buima Group |
| CKM Building Material |
Buima and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buima and CKM Building
The main advantage of trading using opposite Buima and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buima 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.| Buima vs. Hunya Foods Co | Buima vs. Great China Metal | Buima vs. Mercuries Life Insurance | Buima vs. Amulaire Thermal Technology |
| CKM Building vs. Tex Ray Industrial Co | CKM Building vs. China Metal Products | CKM Building vs. Coxon Precise Industrial | CKM Building vs. Chung Lien Transportation |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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