Correlation Between Kolon Globalco and Korea New
Can any of the company-specific risk be diversified away by investing in both Kolon Globalco and Korea New 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 Kolon Globalco and Korea New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Globalco and Korea New Network, you can compare the effects of market volatilities on Kolon Globalco and Korea New 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 Kolon Globalco with a short position of Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Globalco and Korea New.
Diversification Opportunities for Kolon Globalco and Korea New
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kolon and Korea is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Globalco and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network and Kolon Globalco 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 Kolon Globalco are associated (or correlated) with Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Kolon Globalco i.e., Kolon Globalco and Korea New go up and down completely randomly.
Pair Corralation between Kolon Globalco and Korea New
Assuming the 90 days trading horizon Kolon Globalco is expected to generate 3.06 times more return on investment than Korea New. However, Kolon Globalco is 3.06 times more volatile than Korea New Network. It trades about 0.12 of its potential returns per unit of risk. Korea New Network is currently generating about -0.13 per unit of risk. If you would invest 888,000 in Kolon Globalco on September 2, 2024 and sell it today you would earn a total of 107,000 from holding Kolon Globalco or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Globalco vs. Korea New Network
Performance |
| Timeline |
| Kolon Globalco |
| Korea New Network |
Kolon Globalco and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Globalco and Korea New
The main advantage of trading using opposite Kolon Globalco and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Globalco position performs unexpectedly, Korea New 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 New will offset losses from the drop in Korea New's long position.| Kolon Globalco vs. Korea New Network | Kolon Globalco vs. ICD Co | Kolon Globalco vs. DYPNF CoLtd | Kolon Globalco vs. Busan Industrial Co |
| Korea New vs. Hanshin Construction Co | Korea New vs. Netmarble Games Corp | Korea New vs. Seohee Construction Co | Korea New vs. Sungdo Engineering Construction |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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