Correlation Between CKH Food and Narae Nanotech
Can any of the company-specific risk be diversified away by investing in both CKH Food and Narae Nanotech 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 Narae Nanotech 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 Narae Nanotech Corp, you can compare the effects of market volatilities on CKH Food and Narae Nanotech 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 Narae Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Narae Nanotech.
Diversification Opportunities for CKH Food and Narae Nanotech
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between CKH and Narae is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Narae Nanotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Narae Nanotech Corp 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 Narae Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Narae Nanotech Corp has no effect on the direction of CKH Food i.e., CKH Food and Narae Nanotech go up and down completely randomly.
Pair Corralation between CKH Food and Narae Nanotech
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Narae Nanotech. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 1.92 times less risky than Narae Nanotech. The stock trades about -0.05 of its potential returns per unit of risk. The Narae Nanotech Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 344,500 in Narae Nanotech Corp on October 14, 2024 and sell it today you would earn a total of 15,500 from holding Narae Nanotech Corp or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. Narae Nanotech Corp
Performance |
| Timeline |
| CKH Food Health |
| Narae Nanotech Corp |
CKH Food and Narae Nanotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Narae Nanotech
The main advantage of trading using opposite CKH Food and Narae Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Narae Nanotech 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 Narae Nanotech will offset losses from the drop in Narae Nanotech's long position.| CKH Food vs. FOODWELL Co | CKH Food vs. Homecast CoLtd | CKH Food vs. Samlip General Foods | CKH Food vs. Sam Yang Foods |
| Narae Nanotech vs. Infinitt Healthcare Co | Narae Nanotech vs. CKH Food Health | Narae Nanotech vs. CU Medical Systems | Narae Nanotech vs. ABCO Electronics Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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