Correlation Between CKM Building and Information Technology
Can any of the company-specific risk be diversified away by investing in both CKM Building and Information Technology 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 Information Technology 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 Information Technology Total, you can compare the effects of market volatilities on CKM Building and Information Technology 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 Information Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKM Building and Information Technology.
Diversification Opportunities for CKM Building and Information Technology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKM and Information is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CKM Building Material and Information Technology Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Technology 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 Information Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Technology has no effect on the direction of CKM Building i.e., CKM Building and Information Technology go up and down completely randomly.
Pair Corralation between CKM Building and Information Technology
Assuming the 90 days trading horizon CKM Building Material is expected to generate 0.73 times more return on investment than Information Technology. However, CKM Building Material is 1.37 times less risky than Information Technology. It trades about -0.08 of its potential returns per unit of risk. Information Technology Total is currently generating about -0.23 per unit of risk. If you would invest 3,460 in CKM Building Material on September 1, 2024 and sell it today you would lose (80.00) from holding CKM Building Material or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKM Building Material vs. Information Technology Total
Performance |
| Timeline |
| CKM Building Material |
| Information Technology |
CKM Building and Information Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKM Building and Information Technology
The main advantage of trading using opposite CKM Building and Information Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKM Building position performs unexpectedly, Information Technology 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 Information Technology will offset losses from the drop in Information Technology's long position.| CKM Building vs. Formosa International Hotels | CKM Building vs. Sporton International | CKM Building vs. HOYA Resort Hotel | CKM Building vs. Thermaltake Technology Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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