Correlation Between Kumho Industrial and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Kumho Industrial and Myoung Shin 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 Kumho Industrial and Myoung Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumho Industrial Co and Myoung Shin Industrial, you can compare the effects of market volatilities on Kumho Industrial and Myoung Shin 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 Kumho Industrial with a short position of Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Industrial and Myoung Shin.
Diversification Opportunities for Kumho Industrial and Myoung Shin
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kumho and Myoung is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Industrial Co and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial and Kumho Industrial 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 Kumho Industrial Co are associated (or correlated) with Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Kumho Industrial i.e., Kumho Industrial and Myoung Shin go up and down completely randomly.
Pair Corralation between Kumho Industrial and Myoung Shin
Assuming the 90 days trading horizon Kumho Industrial Co is expected to generate 1.01 times more return on investment than Myoung Shin. However, Kumho Industrial is 1.01 times more volatile than Myoung Shin Industrial. It trades about -0.02 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.05 per unit of risk. If you would invest 275,000 in Kumho Industrial Co on October 7, 2024 and sell it today you would lose (6,000) from holding Kumho Industrial Co or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Industrial Co vs. Myoung Shin Industrial
Performance |
| Timeline |
| Kumho Industrial |
| Myoung Shin Industrial |
Kumho Industrial and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Industrial and Myoung Shin
The main advantage of trading using opposite Kumho Industrial and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Industrial position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Daewoo SBI SPAC | Kumho Industrial vs. Dream Security co | Kumho Industrial vs. Microfriend |
| Myoung Shin vs. Busan Industrial Co | Myoung Shin vs. Busan Ind | Myoung Shin vs. UNISEM Co | Myoung Shin vs. RPBio Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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