Correlation Between CKH Food and Aprogen Healthcare

Can any of the company-specific risk be diversified away by investing in both CKH Food and Aprogen Healthcare 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 Aprogen Healthcare 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 Aprogen Healthcare Games, you can compare the effects of market volatilities on CKH Food and Aprogen Healthcare 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 Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKH Food and Aprogen Healthcare.

Diversification Opportunities for CKH Food and Aprogen Healthcare

0.39

Correlation Coefficient

CKH Food  Aprogen Healthcare

Weak diversification

The 3 months correlation between CKH and Aprogen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CKH Food Health and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games 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 Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of CKH Food i.e., CKH Food and Aprogen Healthcare go up and down completely randomly.

Pair Corralation between CKH Food and Aprogen Healthcare

Assuming the 90 days trading horizon CKH Food Health is expected to under-perform the Aprogen Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, CKH Food Health is 2.42 times less risky than Aprogen Healthcare. The stock trades about -0.12 of its potential returns per unit of risk. The Aprogen Healthcare Games is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  48,700  in Aprogen Healthcare Games on September 22, 2024 and sell it today you would earn a total of  9,700  from holding Aprogen Healthcare Games or generate 19.92% return on investment over 90 days.

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

CKH Food Health  vs.  Aprogen Healthcare Games

CKH Food Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CKH Food Health 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aprogen Healthcare Games

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aprogen Healthcare Games are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aprogen Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CKH Food and Aprogen Healthcare

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

The idea behind CKH Food Health and Aprogen Healthcare Games 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.