Correlation Between CKH Food and Moadata
Can any of the company-specific risk be diversified away by investing in both CKH Food and Moadata 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 Moadata 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 Moadata Co, you can compare the effects of market volatilities on CKH Food and Moadata 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 Moadata. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Moadata.
Diversification Opportunities for CKH Food and Moadata
Modest diversification
The 3 months correlation between CKH and Moadata is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Moadata Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moadata 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 Moadata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moadata has no effect on the direction of CKH Food i.e., CKH Food and Moadata go up and down completely randomly.
Pair Corralation between CKH Food and Moadata
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Moadata. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 1.31 times less risky than Moadata. The stock trades about -0.06 of its potential returns per unit of risk. The Moadata Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 333,000 in Moadata Co on August 25, 2024 and sell it today you would lose (187,900) from holding Moadata Co or give up 56.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
CKH Food Health vs. Moadata Co
Performance |
| Timeline |
| CKH Food Health |
| Moadata |
CKH Food and Moadata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Moadata
The main advantage of trading using opposite CKH Food and Moadata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Moadata 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 Moadata will offset losses from the drop in Moadata's long position.| CKH Food vs. AptaBio Therapeutics | CKH Food vs. Daewoo SBI SPAC | CKH Food vs. Dream Security co | CKH Food vs. Microfriend |
| Moadata vs. Daejoo Electronic Materials | Moadata vs. SungMoon Electronics Co | Moadata vs. Okins Electronics Co | Moadata vs. Sunny Electronics Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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