Correlation Between Eugene Investment and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Eugene Investment and Korea Alcohol 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 Eugene Investment and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eugene Investment Securities and Korea Alcohol Industrial, you can compare the effects of market volatilities on Eugene Investment and Korea Alcohol 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 Eugene Investment with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eugene Investment and Korea Alcohol.
Diversification Opportunities for Eugene Investment and Korea Alcohol
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eugene and Korea is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Investment Securities and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and Eugene Investment 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 Eugene Investment Securities are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Eugene Investment i.e., Eugene Investment and Korea Alcohol go up and down completely randomly.
Pair Corralation between Eugene Investment and Korea Alcohol
Assuming the 90 days trading horizon Eugene Investment Securities is expected to under-perform the Korea Alcohol. In addition to that, Eugene Investment is 2.55 times more volatile than Korea Alcohol Industrial. It trades about -0.35 of its total potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.13 per unit of volatility. If you would invest 900,000 in Korea Alcohol Industrial on August 29, 2024 and sell it today you would lose (36,000) from holding Korea Alcohol Industrial or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eugene Investment Securities vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Eugene Investment |
| Korea Alcohol Industrial |
Eugene Investment and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eugene Investment and Korea Alcohol
The main advantage of trading using opposite Eugene Investment and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eugene Investment position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Eugene Investment vs. AptaBio Therapeutics | Eugene Investment vs. Daewoo SBI SPAC | Eugene Investment vs. Dream Security co | Eugene Investment vs. Microfriend |
| Korea Alcohol vs. Kbi Metal Co | Korea Alcohol vs. Lindeman Asia Investment | Korea Alcohol vs. DB Financial Investment | Korea Alcohol vs. Eugene Investment Securities |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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