Correlation Between CKH Food and System
Can any of the company-specific risk be diversified away by investing in both CKH Food and System 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 System 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 System and Application, you can compare the effects of market volatilities on CKH Food and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and System.
Diversification Opportunities for CKH Food and System
Poor diversification
The 3 months correlation between CKH and System is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of CKH Food i.e., CKH Food and System go up and down completely randomly.
Pair Corralation between CKH Food and System
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the System. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 1.49 times less risky than System. The stock trades about -0.2 of its potential returns per unit of risk. The System and Application is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 141,900 in System and Application on August 27, 2024 and sell it today you would earn a total of 8,000 from holding System and Application or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. System and Application
Performance |
| Timeline |
| CKH Food Health |
| System and Application |
CKH Food and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and System
The main advantage of trading using opposite CKH Food and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| CKH Food vs. AptaBio Therapeutics | CKH Food vs. Daewoo SBI SPAC | CKH Food vs. Dream Security co | CKH Food vs. Microfriend |
| System vs. Lake Materials Co | System vs. Top Material Co | System vs. TOPMATERIAL LTD | System vs. Lotte Data Communication |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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