Correlation Between Anam Electronics and Korea Refract
Can any of the company-specific risk be diversified away by investing in both Anam Electronics and Korea Refract 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 Anam Electronics and Korea Refract into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anam Electronics Co and Korea Refract, you can compare the effects of market volatilities on Anam Electronics and Korea Refract 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 Anam Electronics with a short position of Korea Refract. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anam Electronics and Korea Refract.
Diversification Opportunities for Anam Electronics and Korea Refract
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anam and Korea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Anam Electronics Co and Korea Refract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refract and Anam Electronics 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 Anam Electronics Co are associated (or correlated) with Korea Refract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refract has no effect on the direction of Anam Electronics i.e., Anam Electronics and Korea Refract go up and down completely randomly.
Pair Corralation between Anam Electronics and Korea Refract
Assuming the 90 days trading horizon Anam Electronics Co is expected to under-perform the Korea Refract. In addition to that, Anam Electronics is 1.31 times more volatile than Korea Refract. It trades about -0.12 of its total potential returns per unit of risk. Korea Refract is currently generating about -0.09 per unit of volatility. If you would invest 297,485 in Korea Refract on September 4, 2024 and sell it today you would lose (88,485) from holding Korea Refract or give up 29.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anam Electronics Co vs. Korea Refract
Performance |
| Timeline |
| Anam Electronics |
| Korea Refract |
Anam Electronics and Korea Refract Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anam Electronics and Korea Refract
The main advantage of trading using opposite Anam Electronics and Korea Refract positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anam Electronics position performs unexpectedly, Korea Refract 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 Refract will offset losses from the drop in Korea Refract's long position.| Anam Electronics vs. Homecast CoLtd | Anam Electronics vs. Semyung Electric Machinery | Anam Electronics vs. Cuckoo Homesys Co | Anam Electronics vs. Seoul Semiconductor Co |
| Korea Refract vs. Tway Air Co | Korea Refract vs. Foodnamoo | Korea Refract vs. Raontech | Korea Refract vs. Konan Technology |
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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