Correlation Between Kuk Young and Nature
Can any of the company-specific risk be diversified away by investing in both Kuk Young and Nature 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 Kuk Young and Nature into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuk Young GM and Nature and Environment, you can compare the effects of market volatilities on Kuk Young and Nature 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 Kuk Young with a short position of Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuk Young and Nature.
Diversification Opportunities for Kuk Young and Nature
Excellent diversification
The 3 months correlation between Kuk and Nature is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kuk Young GM and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment and Kuk Young 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 Kuk Young GM are associated (or correlated) with Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of Kuk Young i.e., Kuk Young and Nature go up and down completely randomly.
Pair Corralation between Kuk Young and Nature
Assuming the 90 days trading horizon Kuk Young GM is expected to generate 1.74 times more return on investment than Nature. However, Kuk Young is 1.74 times more volatile than Nature and Environment. It trades about 0.1 of its potential returns per unit of risk. Nature and Environment is currently generating about -0.1 per unit of risk. If you would invest 115,500 in Kuk Young GM on September 3, 2024 and sell it today you would earn a total of 79,200 from holding Kuk Young GM or generate 68.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuk Young GM vs. Nature and Environment
Performance |
| Timeline |
| Kuk Young GM |
| Nature and Environment |
Kuk Young and Nature Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuk Young and Nature
The main advantage of trading using opposite Kuk Young and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuk Young position performs unexpectedly, Nature 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 Nature will offset losses from the drop in Nature's long position.| Kuk Young vs. DB Financial Investment | Kuk Young vs. Shinhan Financial Group | Kuk Young vs. Wonil Special Steel | Kuk Young vs. DONGKUK STEEL MILL |
| Nature vs. Sung Bo Chemicals | Nature vs. LB Investment | Nature vs. Seoul Food Industrial | Nature vs. Haitai Confectionery Foods |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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