Correlation Between CKH Food and Nable Communications
Can any of the company-specific risk be diversified away by investing in both CKH Food and Nable Communications 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 Nable Communications 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 Nable Communications, you can compare the effects of market volatilities on CKH Food and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Nable Communications.
Diversification Opportunities for CKH Food and Nable Communications
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CKH and Nable is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of CKH Food i.e., CKH Food and Nable Communications go up and down completely randomly.
Pair Corralation between CKH Food and Nable Communications
Assuming the 90 days trading horizon CKH Food Health is expected to generate 1.53 times more return on investment than Nable Communications. However, CKH Food is 1.53 times more volatile than Nable Communications. It trades about -0.11 of its potential returns per unit of risk. Nable Communications is currently generating about -0.18 per unit of risk. If you would invest 6,900 in CKH Food Health on October 17, 2024 and sell it today you would lose (400.00) from holding CKH Food Health or give up 5.8% 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. Nable Communications
Performance |
| Timeline |
| CKH Food Health |
| Nable Communications |
CKH Food and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Nable Communications
The main advantage of trading using opposite CKH Food and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| CKH Food vs. Hansol Homedeco Co | CKH Food vs. Samji Electronics Co | CKH Food vs. DAEDUCK ELECTRONICS CoLtd | CKH Food vs. Okins Electronics Co |
| Nable Communications vs. Osang Healthcare Co,Ltd | Nable Communications vs. CKH Food Health | Nable Communications vs. LG Display Co | Nable Communications vs. Grand Korea Leisure |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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