Correlation Between CKH Food and Cho Bi
Can any of the company-specific risk be diversified away by investing in both CKH Food and Cho Bi 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 CKH Food and Cho Bi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CKH Food Health and Cho Bi Co, you can compare the effects of market volatilities on CKH Food and Cho Bi 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 CKH Food with a short position of Cho Bi. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Cho Bi.
Diversification Opportunities for CKH Food and Cho Bi
Poor diversification
The 3 months correlation between CKH and Cho is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Cho Bi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Bi and CKH Food 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 CKH Food Health are associated (or correlated) with Cho Bi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Bi has no effect on the direction of CKH Food i.e., CKH Food and Cho Bi go up and down completely randomly.
Pair Corralation between CKH Food and Cho Bi
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Cho Bi. In addition to that, CKH Food is 1.47 times more volatile than Cho Bi Co. It trades about -0.06 of its total potential returns per unit of risk. Cho Bi Co is currently generating about -0.04 per unit of volatility. If you would invest 1,650,000 in Cho Bi Co on September 3, 2024 and sell it today you would lose (622,000) from holding Cho Bi Co or give up 37.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. Cho Bi Co
Performance |
| Timeline |
| CKH Food Health |
| Cho Bi |
CKH Food and Cho Bi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Cho Bi
The main advantage of trading using opposite CKH Food and Cho Bi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Cho Bi 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 Cho Bi will offset losses from the drop in Cho Bi's long position.| CKH Food vs. LG Display | CKH Food vs. Hyundai Motor | CKH Food vs. Hyundai Motor Co | CKH Food vs. Hyundai Motor Co |
| Cho Bi vs. Seoul Electronics Telecom | Cho Bi vs. Nable Communications | Cho Bi vs. Pungguk Ethanol Industrial | Cho Bi vs. Lotte Data Communication |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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