Correlation Between CKH Food and BusinessOn Communication
Can any of the company-specific risk be diversified away by investing in both CKH Food and BusinessOn Communication 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 BusinessOn Communication 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 BusinessOn Communication Co, you can compare the effects of market volatilities on CKH Food and BusinessOn Communication 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 BusinessOn Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and BusinessOn Communication.
Diversification Opportunities for CKH Food and BusinessOn Communication
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CKH and BusinessOn is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and BusinessOn Communication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BusinessOn Communication 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 BusinessOn Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BusinessOn Communication has no effect on the direction of CKH Food i.e., CKH Food and BusinessOn Communication go up and down completely randomly.
Pair Corralation between CKH Food and BusinessOn Communication
Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the BusinessOn Communication. In addition to that, CKH Food is 19.51 times more volatile than BusinessOn Communication Co. It trades about -0.08 of its total potential returns per unit of risk. BusinessOn Communication Co is currently generating about 0.0 per unit of volatility. If you would invest 1,585,000 in BusinessOn Communication Co on September 6, 2024 and sell it today you would earn a total of 0.00 from holding BusinessOn Communication Co or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 64.41% |
Values | Daily Returns |
CKH Food Health vs. BusinessOn Communication Co
Performance |
Timeline |
CKH Food Health |
BusinessOn Communication |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CKH Food and BusinessOn Communication Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CKH Food and BusinessOn Communication
The main advantage of trading using opposite CKH Food and BusinessOn Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKH Food position performs unexpectedly, BusinessOn Communication 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 BusinessOn Communication will offset losses from the drop in BusinessOn Communication's long position.CKH Food vs. LG Display | CKH Food vs. Hyundai Motor | CKH Food vs. Hyundai Motor Co | CKH Food vs. Hyundai Motor Co |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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