Correlation Between Eagon Industrial and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and Koryo Credit 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 Eagon Industrial and Koryo Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and Koryo Credit Information, you can compare the effects of market volatilities on Eagon Industrial and Koryo Credit 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 Eagon Industrial with a short position of Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Koryo Credit.
Diversification Opportunities for Eagon Industrial and Koryo Credit
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagon and Koryo is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information and Eagon Industrial 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 Eagon Industrial Co are associated (or correlated) with Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and Koryo Credit go up and down completely randomly.
Pair Corralation between Eagon Industrial and Koryo Credit
Assuming the 90 days trading horizon Eagon Industrial Co is expected to under-perform the Koryo Credit. In addition to that, Eagon Industrial is 1.12 times more volatile than Koryo Credit Information. It trades about -0.02 of its total potential returns per unit of risk. Koryo Credit Information is currently generating about 0.07 per unit of volatility. If you would invest 1,011,000 in Koryo Credit Information on September 4, 2024 and sell it today you would earn a total of 26,000 from holding Koryo Credit Information or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. Koryo Credit Information
Performance |
| Timeline |
| Eagon Industrial |
| Koryo Credit Information |
Eagon Industrial and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and Koryo Credit
The main advantage of trading using opposite Eagon Industrial and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Eagon Industrial vs. Dongbu Insurance Co | Eagon Industrial vs. BNK Financial Group | Eagon Industrial vs. Korean Reinsurance Co | Eagon Industrial vs. Daewoo Engineering Construction |
| Koryo Credit vs. LG Display | Koryo Credit vs. Hyundai Motor | Koryo Credit vs. Hyundai Motor Co | Koryo Credit vs. Hyundai Motor 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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