Correlation Between CKM Building and Materials Analysis

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

By analyzing existing cross correlation between CKM Building Material and Materials Analysis Technology, you can compare the effects of market volatilities on CKM Building and Materials Analysis 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 CKM Building with a short position of Materials Analysis. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKM Building and Materials Analysis.

Diversification Opportunities for CKM Building and Materials Analysis

-0.93

Correlation Coefficient

CKM Building  Materials Analysis

Pay attention - limited upside

The 3 months correlation between CKM and Materials is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding CKM Building Material and Materials Analysis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Analysis and CKM Building 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 CKM Building Material are associated (or correlated) with Materials Analysis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Analysis has no effect on the direction of CKM Building i.e., CKM Building and Materials Analysis go up and down completely randomly.

Pair Corralation between CKM Building and Materials Analysis

Assuming the 90 days trading horizon CKM Building Material is expected to generate 0.71 times more return on investment than Materials Analysis. However, CKM Building Material is 1.41 times less risky than Materials Analysis. It trades about 0.2 of its potential returns per unit of risk. Materials Analysis Technology is currently generating about -0.31 per unit of risk. If you would invest  3,202  in CKM Building Material on December 30, 2024 and sell it today you would earn a total of  533.00  from holding CKM Building Material or generate 16.65% return on investment over 90 days.

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

CKM Building Material  vs.  Materials Analysis Technology

CKM Building Material

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CKM Building Material are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CKM Building showed solid returns over the last few months and may actually be approaching a breakup point.

Materials Analysis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Materials Analysis Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with CKM Building and Materials Analysis

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

The idea behind CKM Building Material and Materials Analysis Technology 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.