Correlation Between Pureun Mutual and Kolon Plastics
Can any of the company-specific risk be diversified away by investing in both Pureun Mutual and Kolon Plastics 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 Pureun Mutual and Kolon Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pureun Mutual Savings and Kolon Plastics, you can compare the effects of market volatilities on Pureun Mutual and Kolon Plastics 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 Pureun Mutual with a short position of Kolon Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pureun Mutual and Kolon Plastics.
Diversification Opportunities for Pureun Mutual and Kolon Plastics
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pureun and Kolon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Pureun Mutual Savings and Kolon Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Plastics and Pureun Mutual 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 Pureun Mutual Savings are associated (or correlated) with Kolon Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Plastics has no effect on the direction of Pureun Mutual i.e., Pureun Mutual and Kolon Plastics go up and down completely randomly.
Pair Corralation between Pureun Mutual and Kolon Plastics
Assuming the 90 days trading horizon Pureun Mutual Savings is expected to under-perform the Kolon Plastics. But the stock apears to be less risky and, when comparing its historical volatility, Pureun Mutual Savings is 3.13 times less risky than Kolon Plastics. The stock trades about -0.45 of its potential returns per unit of risk. The Kolon Plastics is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 530,000 in Kolon Plastics on October 28, 2024 and sell it today you would earn a total of 12,000 from holding Kolon Plastics or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pureun Mutual Savings vs. Kolon Plastics
Performance |
| Timeline |
| Pureun Mutual Savings |
| Kolon Plastics |
Pureun Mutual and Kolon Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pureun Mutual and Kolon Plastics
The main advantage of trading using opposite Pureun Mutual and Kolon Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pureun Mutual position performs unexpectedly, Kolon Plastics 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 Kolon Plastics will offset losses from the drop in Kolon Plastics' long position.| Pureun Mutual vs. Sewoon Medical Co | Pureun Mutual vs. Innowireless Co | Pureun Mutual vs. Shin Steel Co | Pureun Mutual vs. Fine Besteel Co |
| Kolon Plastics vs. KB Financial Group | Kolon Plastics vs. Shinhan Financial Group | Kolon Plastics vs. Hana Financial | Kolon Plastics vs. Woori Financial Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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