Correlation Between CKM Building and Yong Shun
Can any of the company-specific risk be diversified away by investing in both CKM Building and Yong Shun 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 Yong Shun 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 Yong Shun Chemical, you can compare the effects of market volatilities on CKM Building and Yong Shun 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 Yong Shun. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKM Building and Yong Shun.
Diversification Opportunities for CKM Building and Yong Shun
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CKM and Yong is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CKM Building Material and Yong Shun Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yong Shun Chemical 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 Yong Shun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yong Shun Chemical has no effect on the direction of CKM Building i.e., CKM Building and Yong Shun go up and down completely randomly.
Pair Corralation between CKM Building and Yong Shun
Assuming the 90 days trading horizon CKM Building Material is expected to generate 1.41 times more return on investment than Yong Shun. However, CKM Building is 1.41 times more volatile than Yong Shun Chemical. It trades about 0.17 of its potential returns per unit of risk. Yong Shun Chemical is currently generating about -0.19 per unit of risk. If you would invest 3,440 in CKM Building Material on October 26, 2024 and sell it today you would earn a total of 155.00 from holding CKM Building Material or generate 4.51% 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. Yong Shun Chemical
Performance |
| Timeline |
| CKM Building Material |
| Yong Shun Chemical |
CKM Building and Yong Shun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKM Building and Yong Shun
The main advantage of trading using opposite CKM Building and Yong Shun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKM Building position performs unexpectedly, Yong Shun 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 Yong Shun will offset losses from the drop in Yong Shun's long position.| CKM Building vs. Farglory FTZ Investment | CKM Building vs. Elitegroup Computer Systems | CKM Building vs. WinMate Communication INC | CKM Building vs. Mercuries Life Insurance |
| Yong Shun vs. CKM Building Material | Yong Shun vs. Grand Plastic Technology | Yong Shun vs. Pacific Construction Co | Yong Shun vs. Kuo Yang Construction |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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