Correlation Between CKH Food and Ezwelfare
Can any of the company-specific risk be diversified away by investing in both CKH Food and Ezwelfare 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 Ezwelfare 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 Ezwelfare Co, you can compare the effects of market volatilities on CKH Food and Ezwelfare 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 Ezwelfare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Ezwelfare.
Diversification Opportunities for CKH Food and Ezwelfare
Excellent diversification
The 3 months correlation between CKH and Ezwelfare is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Ezwelfare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ezwelfare 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 Ezwelfare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ezwelfare has no effect on the direction of CKH Food i.e., CKH Food and Ezwelfare go up and down completely randomly.
Pair Corralation between CKH Food and Ezwelfare
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Ezwelfare. In addition to that, CKH Food is 1.64 times more volatile than Ezwelfare Co. It trades about -0.05 of its total potential returns per unit of risk. Ezwelfare Co is currently generating about 0.0 per unit of volatility. If you would invest 589,919 in Ezwelfare Co on September 4, 2024 and sell it today you would lose (34,919) from holding Ezwelfare Co or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. Ezwelfare Co
Performance |
| Timeline |
| CKH Food Health |
| Ezwelfare |
CKH Food and Ezwelfare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Ezwelfare
The main advantage of trading using opposite CKH Food and Ezwelfare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Ezwelfare 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 Ezwelfare will offset losses from the drop in Ezwelfare's long position.| CKH Food vs. LG Display | CKH Food vs. Hyundai Motor | CKH Food vs. Hyundai Motor Co | CKH Food vs. Hyundai Motor Co |
| Ezwelfare vs. Echomarketing CoLtd | Ezwelfare vs. Nice Information Telecommunication | Ezwelfare vs. Display Tech Co | Ezwelfare vs. CKH Food Health |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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