Correlation Between CK Power and Warrix Sport
Can any of the company-specific risk be diversified away by investing in both CK Power and Warrix Sport 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 Warrix Sport 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 Warrix Sport PCL, you can compare the effects of market volatilities on CK Power and Warrix Sport 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 Warrix Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Warrix Sport.
Diversification Opportunities for CK Power and Warrix Sport
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CKP and Warrix is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Warrix Sport PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warrix Sport PCL 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 Warrix Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warrix Sport PCL has no effect on the direction of CK Power i.e., CK Power and Warrix Sport go up and down completely randomly.
Pair Corralation between CK Power and Warrix Sport
Assuming the 90 days trading horizon CK Power Public is expected to generate 0.65 times more return on investment than Warrix Sport. However, CK Power Public is 1.55 times less risky than Warrix Sport. It trades about -0.03 of its potential returns per unit of risk. Warrix Sport PCL is currently generating about -0.05 per unit of risk. If you would invest 394.00 in CK Power Public on November 28, 2024 and sell it today you would lose (132.00) from holding CK Power Public or give up 33.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CK Power Public vs. Warrix Sport PCL
Performance |
| Timeline |
| CK Power Public |
| Warrix Sport PCL |
CK Power and Warrix Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CK Power and Warrix Sport
The main advantage of trading using opposite CK Power and Warrix Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Warrix Sport 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 Warrix Sport will offset losses from the drop in Warrix Sport'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 |
| Warrix Sport vs. SG Capital PCL | Warrix Sport vs. Bound and Beyond | Warrix Sport vs. Yggdrazil Group Public | Warrix Sport vs. Yong Concrete PCL |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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