Correlation Between Yieh United and CKM Building
Can any of the company-specific risk be diversified away by investing in both Yieh United and CKM Building 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 Yieh United and CKM Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yieh United Steel and CKM Building Material, you can compare the effects of market volatilities on Yieh United and CKM Building 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 Yieh United with a short position of CKM Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh United and CKM Building.
Diversification Opportunities for Yieh United and CKM Building
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yieh and CKM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yieh United Steel and CKM Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKM Building Material and Yieh United 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 Yieh United Steel are associated (or correlated) with CKM Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKM Building Material has no effect on the direction of Yieh United i.e., Yieh United and CKM Building go up and down completely randomly.
Pair Corralation between Yieh United and CKM Building
Assuming the 90 days trading horizon Yieh United Steel is expected to under-perform the CKM Building. But the stock apears to be less risky and, when comparing its historical volatility, Yieh United Steel is 1.42 times less risky than CKM Building. The stock trades about -0.03 of its potential returns per unit of risk. The CKM Building Material is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,514 in CKM Building Material on October 7, 2024 and sell it today you would earn a total of 1,951 from holding CKM Building Material or generate 128.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yieh United Steel vs. CKM Building Material
Performance |
| Timeline |
| Yieh United Steel |
| CKM Building Material |
Yieh United and CKM Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yieh United and CKM Building
The main advantage of trading using opposite Yieh United and CKM Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yieh United position performs unexpectedly, CKM Building 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 CKM Building will offset losses from the drop in CKM Building's long position.| Yieh United vs. Basso Industry Corp | Yieh United vs. Chung Hsin Electric Machinery | Yieh United vs. TECO Electric Machinery | Yieh United vs. China General Plastics |
| CKM Building vs. Sunspring Metal Corp | CKM Building vs. Buima Group | CKM Building vs. Champion Building Materials |
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 Stocks Directory module to find actively traded stocks across global markets.
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