Correlation Between CKH Food and Daishin Information
Can any of the company-specific risk be diversified away by investing in both CKH Food and Daishin Information 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 Daishin Information 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 Daishin Information Communications, you can compare the effects of market volatilities on CKH Food and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Daishin Information.
Diversification Opportunities for CKH Food and Daishin Information
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CKH and Daishin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of CKH Food i.e., CKH Food and Daishin Information go up and down completely randomly.
Pair Corralation between CKH Food and Daishin Information
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Daishin Information. In addition to that, CKH Food is 2.39 times more volatile than Daishin Information Communications. It trades about -0.2 of its total potential returns per unit of risk. Daishin Information Communications is currently generating about -0.13 per unit of volatility. If you would invest 91,900 in Daishin Information Communications on August 30, 2024 and sell it today you would lose (6,500) from holding Daishin Information Communications or give up 7.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. Daishin Information Communicat
Performance |
| Timeline |
| CKH Food Health |
| Daishin Information |
CKH Food and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Daishin Information
The main advantage of trading using opposite CKH Food and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| CKH Food vs. Samsung Electronics Co | CKH Food vs. Samsung Electronics Co | CKH Food vs. Hyundai Motor Co | CKH Food vs. Hyundai Motor |
| Daishin Information vs. Cafe24 Corp | Daishin Information vs. Korea Computer Systems | Daishin Information vs. SSR Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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