Correlation Between Korea Petro and Cuckoo Homesys
Can any of the company-specific risk be diversified away by investing in both Korea Petro and Cuckoo Homesys 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 Korea Petro and Cuckoo Homesys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Petro Chemical and Cuckoo Homesys Co, you can compare the effects of market volatilities on Korea Petro and Cuckoo Homesys 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 Korea Petro with a short position of Cuckoo Homesys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Petro and Cuckoo Homesys.
Diversification Opportunities for Korea Petro and Cuckoo Homesys
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Cuckoo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Korea Petro Chemical and Cuckoo Homesys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Homesys and Korea Petro 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 Korea Petro Chemical are associated (or correlated) with Cuckoo Homesys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Homesys has no effect on the direction of Korea Petro i.e., Korea Petro and Cuckoo Homesys go up and down completely randomly.
Pair Corralation between Korea Petro and Cuckoo Homesys
Assuming the 90 days trading horizon Korea Petro Chemical is expected to generate 2.06 times more return on investment than Cuckoo Homesys. However, Korea Petro is 2.06 times more volatile than Cuckoo Homesys Co. It trades about -0.01 of its potential returns per unit of risk. Cuckoo Homesys Co is currently generating about -0.16 per unit of risk. If you would invest 9,930,000 in Korea Petro Chemical on November 2, 2024 and sell it today you would lose (510,000) from holding Korea Petro Chemical or give up 5.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Petro Chemical vs. Cuckoo Homesys Co
Performance |
| Timeline |
| Korea Petro Chemical |
| Cuckoo Homesys |
Korea Petro and Cuckoo Homesys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Petro and Cuckoo Homesys
The main advantage of trading using opposite Korea Petro and Cuckoo Homesys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Petro position performs unexpectedly, Cuckoo Homesys 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 Cuckoo Homesys will offset losses from the drop in Cuckoo Homesys' long position.| Korea Petro vs. Woori Financial Group | Korea Petro vs. Lotte Non Life Insurance | Korea Petro vs. KB Financial Group | Korea Petro vs. Lotte Data Communication |
| Cuckoo Homesys vs. Insung Information Co | Cuckoo Homesys vs. Hankook Steel Co | Cuckoo Homesys vs. Samhyun Steel Co | Cuckoo Homesys vs. BooKook Steel 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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