Correlation Between CKH Food and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both CKH Food and DIGITAL CHOSUN 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 DIGITAL CHOSUN 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 DIGITAL CHOSUN, you can compare the effects of market volatilities on CKH Food and DIGITAL CHOSUN 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 DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and DIGITAL CHOSUN.
Diversification Opportunities for CKH Food and DIGITAL CHOSUN
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKH and DIGITAL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN 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 DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of CKH Food i.e., CKH Food and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between CKH Food and DIGITAL CHOSUN
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the DIGITAL CHOSUN. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 1.04 times less risky than DIGITAL CHOSUN. The stock trades about -0.12 of its potential returns per unit of risk. The DIGITAL CHOSUN is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 167,900 in DIGITAL CHOSUN on September 22, 2024 and sell it today you would earn a total of 3,200 from holding DIGITAL CHOSUN or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. DIGITAL CHOSUN
Performance |
| Timeline |
| CKH Food Health |
| DIGITAL CHOSUN |
CKH Food and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and DIGITAL CHOSUN
The main advantage of trading using opposite CKH Food and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| CKH Food vs. Woori Financial Group | CKH Food vs. Jb Financial | CKH Food vs. Nh Investment And | CKH Food vs. Kumho Petro Chemical |
| DIGITAL CHOSUN vs. Han Kook Steel | DIGITAL CHOSUN vs. J Steel Co | DIGITAL CHOSUN vs. Cuckoo Electronics Co | DIGITAL CHOSUN vs. Insun Environment New |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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