Correlation Between Daishin Information and CKH Food
Can any of the company-specific risk be diversified away by investing in both Daishin Information 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 Daishin Information and CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Information Communications and CKH Food Health, you can compare the effects of market volatilities on Daishin Information 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 Daishin Information with a short position of CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and CKH Food.
Diversification Opportunities for Daishin Information and CKH Food
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daishin and CKH is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat 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 Daishin Information 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 Daishin Information Communications 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 Daishin Information i.e., Daishin Information and CKH Food go up and down completely randomly.
Pair Corralation between Daishin Information and CKH Food
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 2.25 times more return on investment than CKH Food. However, Daishin Information is 2.25 times more volatile than CKH Food Health. It trades about 0.25 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.15 per unit of risk. If you would invest 85,800 in Daishin Information Communications on September 24, 2024 and sell it today you would earn a total of 30,400 from holding Daishin Information Communications or generate 35.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Daishin Information Communicat vs. CKH Food Health
Performance |
Timeline |
Daishin Information |
CKH Food Health |
Daishin Information and CKH Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daishin Information and CKH Food
The main advantage of trading using opposite Daishin Information and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information 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.Daishin Information vs. Hannong Chemicals | Daishin Information vs. Daejung Chemicals Metals | Daishin Information vs. Seoul Food Industrial | Daishin Information vs. Sempio Foods Co |
CKH Food vs. Daishin Information Communications | CKH Food vs. Shinsegae Information Communication | CKH Food vs. Korea Alcohol Industrial | CKH Food vs. Display 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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