Correlation Between CKH Food and FNSTech
Can any of the company-specific risk be diversified away by investing in both CKH Food and FNSTech 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 FNSTech 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 FNSTech Co, you can compare the effects of market volatilities on CKH Food and FNSTech 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 FNSTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and FNSTech.
Diversification Opportunities for CKH Food and FNSTech
Modest diversification
The 3 months correlation between CKH and FNSTech is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech 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 FNSTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech has no effect on the direction of CKH Food i.e., CKH Food and FNSTech go up and down completely randomly.
Pair Corralation between CKH Food and FNSTech
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the FNSTech. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 1.12 times less risky than FNSTech. The stock trades about -0.06 of its potential returns per unit of risk. The FNSTech Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 860,000 in FNSTech Co on October 30, 2024 and sell it today you would earn a total of 228,000 from holding FNSTech Co or generate 26.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.21% |
| Values | Daily Returns |
CKH Food Health vs. FNSTech Co
Performance |
| Timeline |
| CKH Food Health |
| FNSTech |
CKH Food and FNSTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and FNSTech
The main advantage of trading using opposite CKH Food and FNSTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, FNSTech 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 FNSTech will offset losses from the drop in FNSTech'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 |
| FNSTech vs. Samsung Electronics Co | FNSTech vs. Samsung Electronics Co | FNSTech vs. LG Energy Solution | FNSTech vs. SK Hynix |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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