Correlation Between CKH Food and Handok Clean
Can any of the company-specific risk be diversified away by investing in both CKH Food and Handok Clean 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 Handok Clean 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 Handok Clean Tech, you can compare the effects of market volatilities on CKH Food and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Handok Clean.
Diversification Opportunities for CKH Food and Handok Clean
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between CKH and Handok is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of CKH Food i.e., CKH Food and Handok Clean go up and down completely randomly.
Pair Corralation between CKH Food and Handok Clean
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Handok Clean. In addition to that, CKH Food is 1.93 times more volatile than Handok Clean Tech. It trades about -0.06 of its total potential returns per unit of risk. Handok Clean Tech is currently generating about -0.01 per unit of volatility. If you would invest 731,822 in Handok Clean Tech on November 5, 2024 and sell it today you would lose (107,822) from holding Handok Clean Tech or give up 14.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. Handok Clean Tech
Performance |
| Timeline |
| CKH Food Health |
| Handok Clean Tech |
CKH Food and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Handok Clean
The main advantage of trading using opposite CKH Food and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean's long position.| CKH Food vs. Hyunwoo Industrial Co | CKH Food vs. Daiyang Metal Co | CKH Food vs. ABOV Semiconductor Co | CKH Food vs. Formetal Co |
| Handok Clean vs. SCI Information Service | Handok Clean vs. Daewoo Engineering Construction | Handok Clean vs. Daou Data Corp | Handok Clean vs. Hyundai Engineering Construction |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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