Correlation Between CKM Building and Carnival Industrial
Can any of the company-specific risk be diversified away by investing in both CKM Building and Carnival Industrial 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 CKM Building and Carnival Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CKM Building Material and Carnival Industrial Corp, you can compare the effects of market volatilities on CKM Building and Carnival Industrial 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 CKM Building with a short position of Carnival Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKM Building and Carnival Industrial.
Diversification Opportunities for CKM Building and Carnival Industrial
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CKM and Carnival is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CKM Building Material and Carnival Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival Industrial Corp and CKM Building 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 CKM Building Material are associated (or correlated) with Carnival Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival Industrial Corp has no effect on the direction of CKM Building i.e., CKM Building and Carnival Industrial go up and down completely randomly.
Pair Corralation between CKM Building and Carnival Industrial
Assuming the 90 days trading horizon CKM Building Material is expected to generate 1.94 times more return on investment than Carnival Industrial. However, CKM Building is 1.94 times more volatile than Carnival Industrial Corp. It trades about 0.09 of its potential returns per unit of risk. Carnival Industrial Corp is currently generating about -0.06 per unit of risk. If you would invest 1,523 in CKM Building Material on October 11, 2024 and sell it today you would earn a total of 2,087 from holding CKM Building Material or generate 137.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
CKM Building Material vs. Carnival Industrial Corp
Performance |
| Timeline |
| CKM Building Material |
| Carnival Industrial Corp |
CKM Building and Carnival Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKM Building and Carnival Industrial
The main advantage of trading using opposite CKM Building and Carnival Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKM Building position performs unexpectedly, Carnival Industrial 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 Carnival Industrial will offset losses from the drop in Carnival Industrial's long position.| CKM Building vs. Oceanic Beverages Co | CKM Building vs. GameSparcs Co | CKM Building vs. Tehmag Foods | CKM Building vs. Galaxy Software Services |
| Carnival Industrial vs. Grand Plastic Technology | Carnival Industrial vs. CKM Building Material | Carnival Industrial vs. Yonyu Plastics Co | Carnival Industrial vs. Formosan Rubber Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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