Correlation Between Foodnamoo and Choong Ang

Can any of the company-specific risk be diversified away by investing in both Foodnamoo and Choong Ang 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 Foodnamoo and Choong Ang into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Foodnamoo and Choong Ang Vaccine, you can compare the effects of market volatilities on Foodnamoo and Choong Ang 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 Foodnamoo with a short position of Choong Ang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foodnamoo and Choong Ang.

Diversification Opportunities for Foodnamoo and Choong Ang

0.47

Correlation Coefficient

Foodnamoo  Choong Ang

Very weak diversification

The 3 months correlation between Foodnamoo and Choong is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Foodnamoo and Choong Ang Vaccine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choong Ang Vaccine and Foodnamoo 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 Foodnamoo are associated (or correlated) with Choong Ang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choong Ang Vaccine has no effect on the direction of Foodnamoo i.e., Foodnamoo and Choong Ang go up and down completely randomly.

Pair Corralation between Foodnamoo and Choong Ang

Assuming the 90 days trading horizon Foodnamoo is expected to under-perform the Choong Ang. In addition to that, Foodnamoo is 1.63 times more volatile than Choong Ang Vaccine. It trades about -0.14 of its total potential returns per unit of risk. Choong Ang Vaccine is currently generating about 0.0 per unit of volatility. If you would invest  982,000  in Choong Ang Vaccine on October 25, 2024 and sell it today you would lose (1,000.00) from holding Choong Ang Vaccine or give up 0.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Foodnamoo  vs.  Choong Ang Vaccine

Foodnamoo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foodnamoo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Choong Ang Vaccine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Choong Ang Vaccine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Choong Ang is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Foodnamoo and Choong Ang

The main advantage of trading using opposite Foodnamoo and Choong Ang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foodnamoo position performs unexpectedly, Choong Ang 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 Choong Ang will offset losses from the drop in Choong Ang's long position.

The idea behind Foodnamoo and Choong Ang Vaccine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.