Correlation Between GS Engineering and Korea Information
Can any of the company-specific risk be diversified away by investing in both GS Engineering and Korea Information 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 GS Engineering and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and Korea Information Communications, you can compare the effects of market volatilities on GS Engineering and Korea Information 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 GS Engineering with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and Korea Information.
Diversification Opportunities for GS Engineering and Korea Information
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 006360 and Korea is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and GS Engineering 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 GS Engineering Construction are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of GS Engineering i.e., GS Engineering and Korea Information go up and down completely randomly.
Pair Corralation between GS Engineering and Korea Information
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 1.95 times more return on investment than Korea Information. However, GS Engineering is 1.95 times more volatile than Korea Information Communications. It trades about -0.04 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.12 per unit of risk. If you would invest 1,845,000 in GS Engineering Construction on September 22, 2024 and sell it today you would lose (65,000) from holding GS Engineering Construction or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. Korea Information Communicatio
Performance |
| Timeline |
| GS Engineering Const |
| Korea Information |
GS Engineering and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and Korea Information
The main advantage of trading using opposite GS Engineering and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Wonbang Tech Co | GS Engineering vs. Busan Industrial Co | GS Engineering vs. Busan Ind |
| Korea Information vs. Shinhan Inverse Copper | Korea Information vs. CKH Food Health | Korea Information vs. Dongil Metal Co | Korea Information vs. INFINITT Healthcare 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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