Correlation Between PChome Online and CKM Building
Can any of the company-specific risk be diversified away by investing in both PChome Online 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 PChome Online and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PChome Online and CKM Building Material, you can compare the effects of market volatilities on PChome Online 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 PChome Online with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of PChome Online and CKM Building.
Diversification Opportunities for PChome Online and CKM Building
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PChome and CKM is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PChome Online 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 PChome Online 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 PChome Online 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 PChome Online i.e., PChome Online and CKM Building go up and down completely randomly.
Pair Corralation between PChome Online and CKM Building
Assuming the 90 days trading horizon PChome Online is expected to generate 4.44 times more return on investment than CKM Building. However, PChome Online is 4.44 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 -0.15 per unit of risk. If you would invest 4,215 in PChome Online on August 29, 2024 and sell it today you would earn a total of 1,095 from holding PChome Online or generate 25.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PChome Online vs. CKM Building Material
Performance |
| Timeline |
| PChome Online |
| CKM Building Material |
PChome Online and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PChome Online and CKM Building
The main advantage of trading using opposite PChome Online and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PChome Online 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.| PChome Online vs. momo Inc | PChome Online vs. President Chain Store | PChome Online vs. Uni President Enterprises Corp | PChome Online vs. Taiwan FamilyMart Co |
| CKM Building vs. Sunspring Metal Corp | CKM Building vs. Champion Building Materials | CKM Building vs. Leatec Fine Ceramics | CKM Building vs. Information Technology Total |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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