Correlation Between CKH Food and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both CKH Food and NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology Co, you can compare the effects of market volatilities on CKH Food and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and NewFlex Technology.
Diversification Opportunities for CKH Food and NewFlex Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKH and NewFlex is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of CKH Food i.e., CKH Food and NewFlex Technology go up and down completely randomly.
Pair Corralation between CKH Food and NewFlex Technology
Assuming the 90 days trading horizon CKH Food Health is expected to generate 0.5 times more return on investment than NewFlex Technology. However, CKH Food Health is 1.98 times less risky than NewFlex Technology. It trades about -0.24 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.27 per unit of risk. If you would invest 6,600 in CKH Food Health on November 8, 2024 and sell it today you would lose (500.00) from holding CKH Food Health or give up 7.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. NewFlex Technology Co
Performance |
| Timeline |
| CKH Food Health |
| NewFlex Technology |
CKH Food and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and NewFlex Technology
The main advantage of trading using opposite CKH Food and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| CKH Food vs. Hyundai Engineering Construction | CKH Food vs. Dongkuk Structures Construction | CKH Food vs. Dongbang Ship Machinery | CKH Food vs. GS Engineering Construction |
| NewFlex Technology vs. Daol Investment Securities | NewFlex Technology vs. Moonbae Steel | NewFlex Technology vs. Handok Clean Tech | NewFlex Technology vs. Wonil Special Steel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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