Correlation Between Husteel and Kakao Games
Can any of the company-specific risk be diversified away by investing in both Husteel and Kakao Games 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 Husteel and Kakao Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Husteel and Kakao Games Corp, you can compare the effects of market volatilities on Husteel and Kakao Games 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 Husteel with a short position of Kakao Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husteel and Kakao Games.
Diversification Opportunities for Husteel and Kakao Games
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Husteel and Kakao is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Husteel and Kakao Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakao Games Corp and Husteel 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 Husteel are associated (or correlated) with Kakao Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakao Games Corp has no effect on the direction of Husteel i.e., Husteel and Kakao Games go up and down completely randomly.
Pair Corralation between Husteel and Kakao Games
Assuming the 90 days trading horizon Husteel is expected to generate 1.05 times more return on investment than Kakao Games. However, Husteel is 1.05 times more volatile than Kakao Games Corp. It trades about -0.02 of its potential returns per unit of risk. Kakao Games Corp is currently generating about -0.05 per unit of risk. If you would invest 477,050 in Husteel on September 12, 2024 and sell it today you would lose (103,550) from holding Husteel or give up 21.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husteel vs. Kakao Games Corp
Performance |
| Timeline |
| Husteel |
| Kakao Games Corp |
Husteel and Kakao Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husteel and Kakao Games
The main advantage of trading using opposite Husteel and Kakao Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husteel position performs unexpectedly, Kakao Games 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 Kakao Games will offset losses from the drop in Kakao Games' long position.| Husteel vs. LG Chemicals | Husteel vs. POSCO Holdings | Husteel vs. Hanwha Solutions | Husteel vs. Lotte Chemical Corp |
| Kakao Games vs. Devsisters corporation | Kakao Games vs. Konan Technology | Kakao Games vs. Nice Information Telecommunication | Kakao Games vs. SKONEC Entertainment Co |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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