Correlation Between FOODWELL and Keum Kang
Can any of the company-specific risk be diversified away by investing in both FOODWELL and Keum Kang 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 FOODWELL and Keum Kang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOODWELL Co and Keum Kang Steel, you can compare the effects of market volatilities on FOODWELL and Keum Kang 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 FOODWELL with a short position of Keum Kang. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOODWELL and Keum Kang.
Diversification Opportunities for FOODWELL and Keum Kang
Weak diversification
The 3 months correlation between FOODWELL and Keum is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding FOODWELL Co and Keum Kang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keum Kang Steel and FOODWELL 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 FOODWELL Co are associated (or correlated) with Keum Kang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keum Kang Steel has no effect on the direction of FOODWELL i.e., FOODWELL and Keum Kang go up and down completely randomly.
Pair Corralation between FOODWELL and Keum Kang
Assuming the 90 days trading horizon FOODWELL Co is expected to generate 0.91 times more return on investment than Keum Kang. However, FOODWELL Co is 1.09 times less risky than Keum Kang. It trades about 0.01 of its potential returns per unit of risk. Keum Kang Steel is currently generating about -0.14 per unit of risk. If you would invest 519,000 in FOODWELL Co on September 26, 2024 and sell it today you would earn a total of 1,000.00 from holding FOODWELL Co or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOODWELL Co vs. Keum Kang Steel
Performance |
| Timeline |
| FOODWELL |
| Keum Kang Steel |
FOODWELL and Keum Kang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOODWELL and Keum Kang
The main advantage of trading using opposite FOODWELL and Keum Kang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOODWELL position performs unexpectedly, Keum Kang 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 Keum Kang will offset losses from the drop in Keum Kang's long position.| FOODWELL vs. Woori Financial Group | FOODWELL vs. Jb Financial | FOODWELL vs. Nh Investment And | FOODWELL vs. Kumho Petro Chemical |
| Keum Kang vs. LG Chemicals | Keum Kang vs. POSCO Holdings | Keum Kang vs. Hanwha Solutions | Keum Kang vs. Lotte Chemical Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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