Correlation Between Kukdo Chemical and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical and Korea Electronic 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 Kukdo Chemical and Korea Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdo Chemical Co and Korea Electronic Certification, you can compare the effects of market volatilities on Kukdo Chemical and Korea Electronic 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 Kukdo Chemical with a short position of Korea Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and Korea Electronic.
Diversification Opportunities for Kukdo Chemical and Korea Electronic
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukdo and Korea is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical Co and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer and Kukdo Chemical 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 Kukdo Chemical Co are associated (or correlated) with Korea Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Kukdo Chemical i.e., Kukdo Chemical and Korea Electronic go up and down completely randomly.
Pair Corralation between Kukdo Chemical and Korea Electronic
Assuming the 90 days trading horizon Kukdo Chemical Co is expected to generate 1.69 times more return on investment than Korea Electronic. However, Kukdo Chemical is 1.69 times more volatile than Korea Electronic Certification. It trades about 0.31 of its potential returns per unit of risk. Korea Electronic Certification is currently generating about 0.23 per unit of risk. If you would invest 2,995,000 in Kukdo Chemical Co on November 28, 2024 and sell it today you would earn a total of 435,000 from holding Kukdo Chemical Co or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdo Chemical Co vs. Korea Electronic Certification
Performance |
| Timeline |
| Kukdo Chemical |
| Korea Electronic Cer |
Kukdo Chemical and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and Korea Electronic
The main advantage of trading using opposite Kukdo Chemical and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical position performs unexpectedly, Korea Electronic 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 Electronic will offset losses from the drop in Korea Electronic's long position.| Kukdo Chemical vs. Daewoo Engineering Construction | Kukdo Chemical vs. Namkwang Engineering Construction | Kukdo Chemical vs. KCC Engineering Construction | Kukdo Chemical vs. Camus Engineering Construction |
| Korea Electronic vs. Cube Entertainment | Korea Electronic vs. Sungmoon Electronics Co | Korea Electronic vs. Hanjin Transportation Co | Korea Electronic vs. ABCO Electronics 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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