Correlation Between China Crystal and CKH Food
Can any of the company-specific risk be diversified away by investing in both China Crystal and CKH Food 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 China Crystal and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Crystal New and CKH Food Health, you can compare the effects of market volatilities on China Crystal and CKH Food 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 China Crystal with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Crystal and CKH Food.
Diversification Opportunities for China Crystal and CKH Food
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and CKH is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding China Crystal New and CKH Food Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKH Food Health and China Crystal 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 China Crystal New are associated (or correlated) with CKH Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKH Food Health has no effect on the direction of China Crystal i.e., China Crystal and CKH Food go up and down completely randomly.
Pair Corralation between China Crystal and CKH Food
Assuming the 90 days trading horizon China Crystal New is expected to generate 1.09 times more return on investment than CKH Food. However, China Crystal is 1.09 times more volatile than CKH Food Health. It trades about -0.07 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.31 per unit of risk. If you would invest 93,100 in China Crystal New on September 2, 2024 and sell it today you would lose (3,200) from holding China Crystal New or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Crystal New vs. CKH Food Health
Performance |
| Timeline |
| China Crystal New |
| CKH Food Health |
China Crystal and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Crystal and CKH Food
The main advantage of trading using opposite China Crystal and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Crystal position performs unexpectedly, CKH Food 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 CKH Food will offset losses from the drop in CKH Food's long position.| China Crystal vs. Samyung Trading Co | China Crystal vs. Samlip General Foods | China Crystal vs. Jeju Air Co | China Crystal vs. Korea Air Svc |
| CKH Food vs. Korea Real Estate | CKH Food vs. Korea Ratings Co | CKH Food vs. IQuest Co | CKH Food vs. Wonbang Tech Co |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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