Correlation Between Kuk Young and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both Kuk Young and Lion Chemtech 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 Lion Chemtech 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 Lion Chemtech Co, you can compare the effects of market volatilities on Kuk Young and Lion Chemtech 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 Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuk Young and Lion Chemtech.
Diversification Opportunities for Kuk Young and Lion Chemtech
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kuk and Lion is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kuk Young GM and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech 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 Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of Kuk Young i.e., Kuk Young and Lion Chemtech go up and down completely randomly.
Pair Corralation between Kuk Young and Lion Chemtech
Assuming the 90 days trading horizon Kuk Young GM is expected to generate 1.72 times more return on investment than Lion Chemtech. However, Kuk Young is 1.72 times more volatile than Lion Chemtech Co. It trades about 0.1 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about -0.07 per unit of risk. If you would invest 127,500 in Kuk Young GM on August 25, 2024 and sell it today you would earn a total of 96,000 from holding Kuk Young GM or generate 75.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuk Young GM vs. Lion Chemtech Co
Performance |
| Timeline |
| Kuk Young GM |
| Lion Chemtech |
Kuk Young and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuk Young and Lion Chemtech
The main advantage of trading using opposite Kuk Young and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuk Young position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| Kuk Young vs. KIWI Media Group | Kuk Young vs. Daewon Media Co | Kuk Young vs. Barunson Entertainment Arts | Kuk Young vs. Pureun Mutual Savings |
| Lion Chemtech vs. Nature and Environment | Lion Chemtech vs. Cheryong Industrial CoLtd | Lion Chemtech vs. IL Science 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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