Correlation Between CK Power and Globlex Holding
Can any of the company-specific risk be diversified away by investing in both CK Power and Globlex Holding 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 Globlex Holding 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 Globlex Holding Management, you can compare the effects of market volatilities on CK Power and Globlex Holding 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 Globlex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Globlex Holding.
Diversification Opportunities for CK Power and Globlex Holding
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CKP and Globlex is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Globlex Holding Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globlex Holding Mana 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 Globlex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globlex Holding Mana has no effect on the direction of CK Power i.e., CK Power and Globlex Holding go up and down completely randomly.
Pair Corralation between CK Power and Globlex Holding
Assuming the 90 days trading horizon CK Power Public is expected to under-perform the Globlex Holding. But the stock apears to be less risky and, when comparing its historical volatility, CK Power Public is 1.06 times less risky than Globlex Holding. The stock trades about -0.28 of its potential returns per unit of risk. The Globlex Holding Management is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 74.00 in Globlex Holding Management on September 2, 2024 and sell it today you would lose (5.00) from holding Globlex Holding Management or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Power Public vs. Globlex Holding Management
Performance |
| Timeline |
| CK Power Public |
| Globlex Holding Mana |
CK Power and Globlex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Globlex Holding
The main advantage of trading using opposite CK Power and Globlex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Globlex Holding 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 Globlex Holding will offset losses from the drop in Globlex Holding'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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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