Correlation Between CKH Food and Settlebank
Can any of the company-specific risk be diversified away by investing in both CKH Food and Settlebank 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 Settlebank 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 Settlebank, you can compare the effects of market volatilities on CKH Food and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Settlebank.
Diversification Opportunities for CKH Food and Settlebank
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CKH and Settlebank is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of CKH Food i.e., CKH Food and Settlebank go up and down completely randomly.
Pair Corralation between CKH Food and Settlebank
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Settlebank. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 1.55 times less risky than Settlebank. The stock trades about -0.19 of its potential returns per unit of risk. The Settlebank is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,581,000 in Settlebank on August 29, 2024 and sell it today you would lose (16,000) from holding Settlebank or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CKH Food Health vs. Settlebank
Performance |
| Timeline |
| CKH Food Health |
| Settlebank |
CKH Food and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Settlebank
The main advantage of trading using opposite CKH Food and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| CKH Food vs. Samsung Electronics Co | CKH Food vs. Samsung Electronics Co | CKH Food vs. Hyundai Motor Co | CKH Food vs. Hyundai Motor |
| Settlebank vs. Cafe24 Corp | Settlebank vs. Korea Computer Systems | Settlebank vs. Daishin Information Communications | Settlebank vs. SSR Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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