Correlation Between Kia Corp and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Kia Corp and Jeong Moon 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 Kia Corp and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and Jeong Moon Information, you can compare the effects of market volatilities on Kia Corp and Jeong Moon 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 Kia Corp with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and Jeong Moon.
Diversification Opportunities for Kia Corp and Jeong Moon
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kia and Jeong is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and Kia Corp 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 Kia Corp are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Kia Corp i.e., Kia Corp and Jeong Moon go up and down completely randomly.
Pair Corralation between Kia Corp and Jeong Moon
Assuming the 90 days trading horizon Kia Corp is expected to generate 1.44 times less return on investment than Jeong Moon. But when comparing it to its historical volatility, Kia Corp is 1.11 times less risky than Jeong Moon. It trades about 0.02 of its potential returns per unit of risk. Jeong Moon Information is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 82,700 in Jeong Moon Information on November 3, 2024 and sell it today you would earn a total of 500.00 from holding Jeong Moon Information or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. Jeong Moon Information
Performance |
| Timeline |
| Kia Corp |
| Jeong Moon Information |
Kia Corp and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and Jeong Moon
The main advantage of trading using opposite Kia Corp and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| Kia Corp vs. Jeju Bank | Kia Corp vs. Nature and Environment | Kia Corp vs. Lotte Non Life Insurance | Kia Corp vs. Hyundai BNG Steel |
| Jeong Moon vs. Woori Technology Investment | Jeong Moon vs. Yura Tech Co | Jeong Moon vs. Orbitech Co | Jeong Moon vs. Coloray International 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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