Correlation Between CKM Building and China Glaze
Can any of the company-specific risk be diversified away by investing in both CKM Building and China Glaze 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 China Glaze 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 China Glaze Co, you can compare the effects of market volatilities on CKM Building and China Glaze 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 China Glaze. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKM Building and China Glaze.
Diversification Opportunities for CKM Building and China Glaze
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKM and China is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CKM Building Material and China Glaze Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Glaze 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 China Glaze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Glaze has no effect on the direction of CKM Building i.e., CKM Building and China Glaze go up and down completely randomly.
Pair Corralation between CKM Building and China Glaze
Assuming the 90 days trading horizon CKM Building Material is expected to generate 0.92 times more return on investment than China Glaze. However, CKM Building Material is 1.09 times less risky than China Glaze. It trades about 0.18 of its potential returns per unit of risk. China Glaze Co is currently generating about -0.14 per unit of risk. If you would invest 3,430 in CKM Building Material on October 25, 2024 and sell it today you would earn a total of 165.00 from holding CKM Building Material or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKM Building Material vs. China Glaze Co
Performance |
| Timeline |
| CKM Building Material |
| China Glaze |
CKM Building and China Glaze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKM Building and China Glaze
The main advantage of trading using opposite CKM Building and China Glaze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKM Building position performs unexpectedly, China Glaze 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 China Glaze will offset losses from the drop in China Glaze's long position.| CKM Building vs. SuperAlloy Industrial Co, | CKM Building vs. Hi Lai Foods Co | CKM Building vs. Chung Hwa Food | CKM Building vs. Tigerair Taiwan Co |
| China Glaze vs. Nan Ya Plastics | China Glaze vs. Formosa Chemicals Fibre | China Glaze vs. China Steel Corp | China Glaze vs. Formosa Petrochemical Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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