Correlation Between CKH Food and Youl Chon
Can any of the company-specific risk be diversified away by investing in both CKH Food and Youl Chon 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 Youl Chon 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 Youl Chon Chemical, you can compare the effects of market volatilities on CKH Food and Youl Chon 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 Youl Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Youl Chon.
Diversification Opportunities for CKH Food and Youl Chon
Excellent diversification
The 3 months correlation between CKH and Youl is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Youl Chon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youl Chon Chemical 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 Youl Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youl Chon Chemical has no effect on the direction of CKH Food i.e., CKH Food and Youl Chon go up and down completely randomly.
Pair Corralation between CKH Food and Youl Chon
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Youl Chon. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 3.18 times less risky than Youl Chon. The stock trades about -0.26 of its potential returns per unit of risk. The Youl Chon Chemical is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,330,000 in Youl Chon Chemical on December 11, 2024 and sell it today you would earn a total of 440,000 from holding Youl Chon Chemical or generate 18.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. Youl Chon Chemical
Performance |
| Timeline |
| CKH Food Health |
| Youl Chon Chemical |
CKH Food and Youl Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Youl Chon
The main advantage of trading using opposite CKH Food and Youl Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Youl Chon 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 Youl Chon will offset losses from the drop in Youl Chon's long position.| CKH Food vs. Lotte Non Life Insurance | CKH Food vs. Hanwha Life Insurance | CKH Food vs. Dgb Financial | CKH Food vs. Korean Reinsurance Co |
| Youl Chon vs. Kukil Metal Co | Youl Chon vs. Duksan Hi Metal | Youl Chon vs. Dongil Metal Co | Youl Chon vs. Hanjoo Light Metal |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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