Correlation Between Kumho Industrial and Okins Electronics
Can any of the company-specific risk be diversified away by investing in both Kumho Industrial and Okins Electronics 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 Okins Electronics 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 Okins Electronics Co, you can compare the effects of market volatilities on Kumho Industrial and Okins Electronics 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 Okins Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Industrial and Okins Electronics.
Diversification Opportunities for Kumho Industrial and Okins Electronics
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kumho and Okins is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Industrial Co and Okins Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okins Electronics 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 Okins Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okins Electronics has no effect on the direction of Kumho Industrial i.e., Kumho Industrial and Okins Electronics go up and down completely randomly.
Pair Corralation between Kumho Industrial and Okins Electronics
Assuming the 90 days trading horizon Kumho Industrial Co is expected to generate 0.42 times more return on investment than Okins Electronics. However, Kumho Industrial Co is 2.35 times less risky than Okins Electronics. It trades about -0.08 of its potential returns per unit of risk. Okins Electronics Co is currently generating about -0.03 per unit of risk. If you would invest 724,324 in Kumho Industrial Co on August 30, 2024 and sell it today you would lose (432,824) from holding Kumho Industrial Co or give up 59.76% 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. Okins Electronics Co
Performance |
| Timeline |
| Kumho Industrial |
| Okins Electronics |
Kumho Industrial and Okins Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Industrial and Okins Electronics
The main advantage of trading using opposite Kumho Industrial and Okins Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Industrial position performs unexpectedly, Okins Electronics 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 Okins Electronics will offset losses from the drop in Okins Electronics' long position.| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Daewoo SBI SPAC | Kumho Industrial vs. Dream Security co | Kumho Industrial vs. Microfriend |
| Okins Electronics vs. Daou Data Corp | Okins Electronics vs. Busan Industrial Co | Okins Electronics vs. Busan Ind | Okins Electronics vs. Shinhan WTI Futures |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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