Correlation Between CKM Building and Chung Fu
Can any of the company-specific risk be diversified away by investing in both CKM Building and Chung Fu 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 Chung Fu 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 Chung Fu Tex International, you can compare the effects of market volatilities on CKM Building and Chung Fu 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 Chung Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKM Building and Chung Fu.
Diversification Opportunities for CKM Building and Chung Fu
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CKM and Chung is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CKM Building Material and Chung Fu Tex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Fu Tex 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 Chung Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Fu Tex has no effect on the direction of CKM Building i.e., CKM Building and Chung Fu go up and down completely randomly.
Pair Corralation between CKM Building and Chung Fu
Assuming the 90 days trading horizon CKM Building Material is expected to generate 0.65 times more return on investment than Chung Fu. However, CKM Building Material is 1.54 times less risky than Chung Fu. It trades about 0.04 of its potential returns per unit of risk. Chung Fu Tex International is currently generating about 0.01 per unit of risk. If you would invest 3,027 in CKM Building Material on September 14, 2024 and sell it today you would earn a total of 508.00 from holding CKM Building Material or generate 16.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKM Building Material vs. Chung Fu Tex International
Performance |
| Timeline |
| CKM Building Material |
| Chung Fu Tex |
CKM Building and Chung Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKM Building and Chung Fu
The main advantage of trading using opposite CKM Building and Chung Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKM Building position performs unexpectedly, Chung Fu 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 Chung Fu will offset losses from the drop in Chung Fu's long position.| CKM Building vs. First Copper Technology | CKM Building vs. Yieh United Steel | CKM Building vs. Amulaire Thermal Technology | CKM Building vs. Grand Ocean Retail |
| Chung Fu vs. IBF Financial Holdings | Chung Fu vs. CKM Building Material | Chung Fu vs. General Plastic Industrial | Chung Fu vs. Materials Analysis Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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