Correlation Between CKH Food and LG Chem
Can any of the company-specific risk be diversified away by investing in both CKH Food and LG Chem 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 LG Chem 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 LG Chem, you can compare the effects of market volatilities on CKH Food and LG Chem 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 LG Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and LG Chem.
Diversification Opportunities for CKH Food and LG Chem
Almost no diversification
The 3 months correlation between CKH and 051915 is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and LG Chem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Chem 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 LG Chem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Chem has no effect on the direction of CKH Food i.e., CKH Food and LG Chem go up and down completely randomly.
Pair Corralation between CKH Food and LG Chem
Assuming the 90 days trading horizon CKH Food Health is expected to generate 1.13 times more return on investment than LG Chem. However, CKH Food is 1.13 times more volatile than LG Chem. It trades about -0.02 of its potential returns per unit of risk. LG Chem is currently generating about -0.2 per unit of risk. If you would invest 6,400 in CKH Food Health on October 27, 2024 and sell it today you would lose (100.00) from holding CKH Food Health or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. LG Chem
Performance |
| Timeline |
| CKH Food Health |
| LG Chem |
CKH Food and LG Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and LG Chem
The main advantage of trading using opposite CKH Food and LG Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, LG Chem 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 LG Chem will offset losses from the drop in LG Chem's long position.| CKH Food vs. Woori Financial Group | CKH Food vs. InfoBank | CKH Food vs. Settlebank | CKH Food vs. Korean Reinsurance Co |
| LG Chem vs. A Tech Solution Co | LG Chem vs. Yura Tech Co | LG Chem vs. Orbitech Co | LG Chem vs. Dongwoon Anatech 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |