Correlation Between CKM Building and Yuan High
Can any of the company-specific risk be diversified away by investing in both CKM Building and Yuan High 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 Yuan High 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 Yuan High Tech Development, you can compare the effects of market volatilities on CKM Building and Yuan High 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 Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKM Building and Yuan High.
Diversification Opportunities for CKM Building and Yuan High
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CKM and Yuan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CKM Building Material and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech 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 Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of CKM Building i.e., CKM Building and Yuan High go up and down completely randomly.
Pair Corralation between CKM Building and Yuan High
Assuming the 90 days trading horizon CKM Building is expected to generate 1.23 times less return on investment than Yuan High. But when comparing it to its historical volatility, CKM Building Material is 1.55 times less risky than Yuan High. It trades about 0.08 of its potential returns per unit of risk. Yuan High Tech Development is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,937 in Yuan High Tech Development on August 31, 2024 and sell it today you would earn a total of 7,063 from holding Yuan High Tech Development or generate 88.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKM Building Material vs. Yuan High Tech Development
Performance |
| Timeline |
| CKM Building Material |
| Yuan High Tech |
CKM Building and Yuan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKM Building and Yuan High
The main advantage of trading using opposite CKM Building and Yuan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKM Building position performs unexpectedly, Yuan High 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 Yuan High will offset losses from the drop in Yuan High's long position.| CKM Building vs. Sunspring Metal Corp | CKM Building vs. Champion Building Materials | CKM Building vs. Leatec Fine Ceramics | CKM Building vs. Information Technology Total |
| Yuan High vs. Chief Telecom | Yuan High vs. Eternal Materials Co | Yuan High vs. Nankang Rubber Tire | Yuan High vs. CKM Building Material |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |