Correlation Between CKH Food and CHEMTRONICSCOLtd
Can any of the company-specific risk be diversified away by investing in both CKH Food and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd, you can compare the effects of market volatilities on CKH Food and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and CHEMTRONICSCOLtd.
Diversification Opportunities for CKH Food and CHEMTRONICSCOLtd
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CKH and CHEMTRONICSCOLtd is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and CHEMTRONICSCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMTRONICSCOLtd has no effect on the direction of CKH Food i.e., CKH Food and CHEMTRONICSCOLtd go up and down completely randomly.
Pair Corralation between CKH Food and CHEMTRONICSCOLtd
Assuming the 90 days trading horizon CKH Food Health is expected to generate 0.88 times more return on investment than CHEMTRONICSCOLtd. However, CKH Food Health is 1.14 times less risky than CHEMTRONICSCOLtd. It trades about -0.31 of its potential returns per unit of risk. CHEMTRONICSCOLtd is currently generating about -0.47 per unit of risk. If you would invest 8,000 in CKH Food Health on September 1, 2024 and sell it today you would lose (1,000.00) from holding CKH Food Health or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
CKH Food Health vs. CHEMTRONICSCOLtd
Performance |
| Timeline |
| CKH Food Health |
| CHEMTRONICSCOLtd |
CKH Food and CHEMTRONICSCOLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and CHEMTRONICSCOLtd
The main advantage of trading using opposite CKH Food and CHEMTRONICSCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd will offset losses from the drop in CHEMTRONICSCOLtd's long position.| CKH Food vs. Korea Real Estate | CKH Food vs. Korea Ratings Co | CKH Food vs. IQuest Co | CKH Food vs. Wonbang Tech Co |
| CHEMTRONICSCOLtd vs. Hyundai Green Food | CHEMTRONICSCOLtd vs. Inzi Display CoLtd | CHEMTRONICSCOLtd vs. CKH Food Health | CHEMTRONICSCOLtd vs. Iljin Display |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |