Correlation Between CKH Food and Samlip General
Can any of the company-specific risk be diversified away by investing in both CKH Food and Samlip General 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 Samlip General 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 Samlip General Foods, you can compare the effects of market volatilities on CKH Food and Samlip General 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 Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Samlip General.
Diversification Opportunities for CKH Food and Samlip General
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CKH and Samlip is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods 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 Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of CKH Food i.e., CKH Food and Samlip General go up and down completely randomly.
Pair Corralation between CKH Food and Samlip General
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Samlip General. In addition to that, CKH Food is 2.25 times more volatile than Samlip General Foods. It trades about -0.2 of its total potential returns per unit of risk. Samlip General Foods is currently generating about -0.14 per unit of volatility. If you would invest 5,160,000 in Samlip General Foods on August 31, 2024 and sell it today you would lose (415,000) from holding Samlip General Foods or give up 8.04% 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. Samlip General Foods
Performance |
| Timeline |
| CKH Food Health |
| Samlip General Foods |
CKH Food and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Samlip General
The main advantage of trading using opposite CKH Food and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| CKH Food vs. Korea Real Estate | CKH Food vs. Korea Ratings Co | CKH Food vs. IQuest Co | CKH Food vs. Wonbang Tech Co |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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