Correlation Between Bohae Brewery and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Bohae Brewery and Kukil Metal 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 Bohae Brewery and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bohae Brewery and Kukil Metal Co, you can compare the effects of market volatilities on Bohae Brewery and Kukil Metal 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 Bohae Brewery with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bohae Brewery and Kukil Metal.
Diversification Opportunities for Bohae Brewery and Kukil Metal
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bohae and Kukil is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bohae Brewery and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and Bohae Brewery 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 Bohae Brewery are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Bohae Brewery i.e., Bohae Brewery and Kukil Metal go up and down completely randomly.
Pair Corralation between Bohae Brewery and Kukil Metal
Assuming the 90 days trading horizon Bohae Brewery is expected to generate 4.78 times more return on investment than Kukil Metal. However, Bohae Brewery is 4.78 times more volatile than Kukil Metal Co. It trades about 0.09 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.31 per unit of risk. If you would invest 42,300 in Bohae Brewery on September 1, 2024 and sell it today you would earn a total of 4,300 from holding Bohae Brewery or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bohae Brewery vs. Kukil Metal Co
Performance |
| Timeline |
| Bohae Brewery |
| Kukil Metal |
Bohae Brewery and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bohae Brewery and Kukil Metal
The main advantage of trading using opposite Bohae Brewery and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bohae Brewery position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Bohae Brewery vs. Korea Real Estate | Bohae Brewery vs. Korea Ratings Co | Bohae Brewery vs. IQuest Co | Bohae Brewery vs. Wonbang Tech Co |
| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. Gyeongnam Steel Co | Kukil Metal vs. Jeil Steel Mfg |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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