Correlation Between CKH Food and Kakaopay Corp
Can any of the company-specific risk be diversified away by investing in both CKH Food and Kakaopay Corp 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 Kakaopay Corp 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 kakaopay Corp, you can compare the effects of market volatilities on CKH Food and Kakaopay Corp 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 Kakaopay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Kakaopay Corp.
Diversification Opportunities for CKH Food and Kakaopay Corp
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CKH and Kakaopay is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and kakaopay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on kakaopay 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 Kakaopay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of kakaopay Corp has no effect on the direction of CKH Food i.e., CKH Food and Kakaopay Corp go up and down completely randomly.
Pair Corralation between CKH Food and Kakaopay Corp
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Kakaopay Corp. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 1.35 times less risky than Kakaopay Corp. The stock trades about -0.31 of its potential returns per unit of risk. The kakaopay Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,380,000 in kakaopay Corp on September 2, 2024 and sell it today you would earn a total of 95,000 from holding kakaopay Corp or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKH Food Health vs. kakaopay Corp
Performance |
| Timeline |
| CKH Food Health |
| kakaopay Corp |
CKH Food and Kakaopay Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKH Food and Kakaopay Corp
The main advantage of trading using opposite CKH Food and Kakaopay Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, Kakaopay Corp 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 Kakaopay Corp will offset losses from the drop in Kakaopay Corp's long position.| CKH Food vs. Korea Real Estate | CKH Food vs. Korea Ratings Co | CKH Food vs. IQuest Co | CKH Food vs. Wonbang Tech Co |
| Kakaopay Corp vs. Hyundai Green Food | Kakaopay Corp vs. CKH Food Health | Kakaopay Corp vs. Formetal Co | Kakaopay Corp vs. Taeyang Metal Industrial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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