Correlation Between CKH Food and Han Kook
Can any of the company-specific risk be diversified away by investing in both CKH Food and Han Kook 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 Han Kook 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 Han Kook Steel, you can compare the effects of market volatilities on CKH Food and Han Kook 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 Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Han Kook.
Diversification Opportunities for CKH Food and Han Kook
Modest diversification
The 3 months correlation between CKH and Han is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Han Kook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Steel 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 Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Steel has no effect on the direction of CKH Food i.e., CKH Food and Han Kook go up and down completely randomly.
Pair Corralation between CKH Food and Han Kook
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Han Kook. In addition to that, CKH Food is 1.39 times more volatile than Han Kook Steel. It trades about -0.13 of its total potential returns per unit of risk. Han Kook Steel is currently generating about -0.16 per unit of volatility. If you would invest 187,900 in Han Kook Steel on October 30, 2024 and sell it today you would lose (7,700) from holding Han Kook Steel or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. Han Kook Steel
Performance |
| Timeline |
| CKH Food Health |
| Han Kook Steel |
CKH Food and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Han Kook
The main advantage of trading using opposite CKH Food and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| CKH Food vs. SAMG Entertainment Co | CKH Food vs. SK Chemicals Co | CKH Food vs. Barunson Entertainment Arts | CKH Food vs. SM Entertainment Co |
| Han Kook vs. V One Tech Co | Han Kook vs. Hanshin Construction Co | Han Kook vs. Dongkuk Structures Construction | Han Kook vs. Woorim Machinery 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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