Correlation Between CK Power and Dental Public
Can any of the company-specific risk be diversified away by investing in both CK Power and Dental Public 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 CK Power and Dental Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CK Power Public and Dental Public, you can compare the effects of market volatilities on CK Power and Dental Public 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 CK Power with a short position of Dental Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Dental Public.
Diversification Opportunities for CK Power and Dental Public
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CKP and Dental is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Dental Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dental Public and CK Power 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 CK Power Public are associated (or correlated) with Dental Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dental Public has no effect on the direction of CK Power i.e., CK Power and Dental Public go up and down completely randomly.
Pair Corralation between CK Power and Dental Public
Assuming the 90 days trading horizon CK Power Public is expected to under-perform the Dental Public. But the stock apears to be less risky and, when comparing its historical volatility, CK Power Public is 50.64 times less risky than Dental Public. The stock trades about -0.08 of its potential returns per unit of risk. The Dental Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 357.00 in Dental Public on September 1, 2024 and sell it today you would lose (39.00) from holding Dental Public or give up 10.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
CK Power Public vs. Dental Public
Performance |
| Timeline |
| CK Power Public |
| Dental Public |
CK Power and Dental Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Dental Public
The main advantage of trading using opposite CK Power and Dental Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Dental Public 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 Dental Public will offset losses from the drop in Dental Public's long position.| CK Power vs. Energy Absolute Public | CK Power vs. BCPG Public | CK Power vs. Bangkok Expressway and | CK Power vs. Gulf Energy Development |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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