Correlation Between CKH Food and NH Investment
Can any of the company-specific risk be diversified away by investing in both CKH Food and NH Investment 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 CKH Food and NH Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CKH Food Health and NH Investment Securities, you can compare the effects of market volatilities on CKH Food and NH Investment 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 CKH Food with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and NH Investment.
Diversification Opportunities for CKH Food and NH Investment
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between CKH and 005940 is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and NH Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Investment Securities and CKH Food 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 CKH Food Health are associated (or correlated) with NH Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Investment Securities has no effect on the direction of CKH Food i.e., CKH Food and NH Investment go up and down completely randomly.
Pair Corralation between CKH Food and NH Investment
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the NH Investment. In addition to that, CKH Food is 2.18 times more volatile than NH Investment Securities. It trades about -0.06 of its total potential returns per unit of risk. NH Investment Securities is currently generating about 0.08 per unit of volatility. If you would invest 840,765 in NH Investment Securities on September 26, 2024 and sell it today you would earn a total of 584,235 from holding NH Investment Securities or generate 69.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
CKH Food Health vs. NH Investment Securities
Performance |
Timeline |
CKH Food Health |
NH Investment Securities |
CKH Food and NH Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CKH Food and NH Investment
The main advantage of trading using opposite CKH Food and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, NH Investment 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 NH Investment will offset losses from the drop in NH Investment's long position.CKH Food vs. Woori Financial Group | CKH Food vs. Jb Financial | CKH Food vs. Nh Investment And | CKH Food vs. Kumho Petro Chemical |
NH Investment vs. CKH Food Health | NH Investment vs. Hyundai Green Food | NH Investment vs. Organic Special Pet | NH Investment vs. Taegu Broadcasting |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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