Correlation Between KyungIn Electronics and Wooyang
Can any of the company-specific risk be diversified away by investing in both KyungIn Electronics and Wooyang 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 KyungIn Electronics and Wooyang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KyungIn Electronics Co and Wooyang Co, you can compare the effects of market volatilities on KyungIn Electronics and Wooyang 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 KyungIn Electronics with a short position of Wooyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of KyungIn Electronics and Wooyang.
Diversification Opportunities for KyungIn Electronics and Wooyang
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KyungIn and Wooyang is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding KyungIn Electronics Co and Wooyang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wooyang and KyungIn 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 KyungIn Electronics Co are associated (or correlated) with Wooyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wooyang has no effect on the direction of KyungIn Electronics i.e., KyungIn Electronics and Wooyang go up and down completely randomly.
Pair Corralation between KyungIn Electronics and Wooyang
Assuming the 90 days trading horizon KyungIn Electronics Co is expected to generate 0.85 times more return on investment than Wooyang. However, KyungIn Electronics Co is 1.17 times less risky than Wooyang. It trades about 0.02 of its potential returns per unit of risk. Wooyang Co is currently generating about -0.01 per unit of risk. If you would invest 2,075,000 in KyungIn Electronics Co on September 19, 2024 and sell it today you would earn a total of 5,000 from holding KyungIn Electronics Co or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KyungIn Electronics Co vs. Wooyang Co
Performance |
| Timeline |
| KyungIn Electronics |
| Wooyang |
KyungIn Electronics and Wooyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KyungIn Electronics and Wooyang
The main advantage of trading using opposite KyungIn Electronics and Wooyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KyungIn Electronics position performs unexpectedly, Wooyang 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 Wooyang will offset losses from the drop in Wooyang's long position.| KyungIn Electronics vs. Samsung Electronics Co | KyungIn Electronics vs. Samsung Electronics Co | KyungIn Electronics vs. SK Hynix | KyungIn Electronics vs. POSCO Holdings |
| Wooyang vs. SungMoon Electronics Co | Wooyang vs. Sungmoon Electronics Co | Wooyang vs. Shinsegae Information Communication | Wooyang vs. KyungIn 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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