Correlation Between Kumho Industrial and Cheryong Industrial
Can any of the company-specific risk be diversified away by investing in both Kumho Industrial and Cheryong Industrial 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 Cheryong Industrial 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 Cheryong Industrial CoLtd, you can compare the effects of market volatilities on Kumho Industrial and Cheryong Industrial 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 Cheryong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumho Industrial and Cheryong Industrial.
Diversification Opportunities for Kumho Industrial and Cheryong Industrial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kumho and Cheryong is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kumho Industrial Co and Cheryong Industrial CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Industrial CoLtd 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 Cheryong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Industrial CoLtd has no effect on the direction of Kumho Industrial i.e., Kumho Industrial and Cheryong Industrial go up and down completely randomly.
Pair Corralation between Kumho Industrial and Cheryong Industrial
Assuming the 90 days trading horizon Kumho Industrial Co is expected to under-perform the Cheryong Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Kumho Industrial Co is 2.7 times less risky than Cheryong Industrial. The stock trades about -0.12 of its potential returns per unit of risk. The Cheryong Industrial CoLtd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 466,310 in Cheryong Industrial CoLtd on August 31, 2024 and sell it today you would earn a total of 47,690 from holding Cheryong Industrial CoLtd or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kumho Industrial Co vs. Cheryong Industrial CoLtd
Performance |
| Timeline |
| Kumho Industrial |
| Cheryong Industrial CoLtd |
Kumho Industrial and Cheryong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumho Industrial and Cheryong Industrial
The main advantage of trading using opposite Kumho Industrial and Cheryong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumho Industrial position performs unexpectedly, Cheryong Industrial 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 Cheryong Industrial will offset losses from the drop in Cheryong Industrial's long position.| Kumho Industrial vs. Mobileleader CoLtd | Kumho Industrial vs. Nice Information Telecommunication | Kumho Industrial vs. SK Telecom Co | Kumho Industrial vs. Shinsegae Information Communication |
| Cheryong Industrial vs. Nature and Environment | Cheryong Industrial vs. Busan Industrial Co | Cheryong Industrial vs. Busan Ind | Cheryong Industrial vs. Mirae Asset Daewoo |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |