Correlation Between Korea Shipbuilding and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and Daewon Media 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 Korea Shipbuilding and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and Daewon Media Co, you can compare the effects of market volatilities on Korea Shipbuilding and Daewon Media 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 Korea Shipbuilding with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Daewon Media.
Diversification Opportunities for Korea Shipbuilding and Daewon Media
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Daewon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and Korea Shipbuilding 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 Korea Shipbuilding Offshore are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and Daewon Media go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Daewon Media
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.11 times more return on investment than Daewon Media. However, Korea Shipbuilding is 1.11 times more volatile than Daewon Media Co. It trades about 0.2 of its potential returns per unit of risk. Daewon Media Co is currently generating about 0.14 per unit of risk. If you would invest 19,440,000 in Korea Shipbuilding Offshore on October 19, 2024 and sell it today you would earn a total of 4,910,000 from holding Korea Shipbuilding Offshore or generate 25.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Daewon Media Co
Performance |
| Timeline |
| Korea Shipbuilding |
| Daewon Media |
Korea Shipbuilding and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Daewon Media
The main advantage of trading using opposite Korea Shipbuilding and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Korea Shipbuilding vs. Heungkuk Metaltech CoLtd | Korea Shipbuilding vs. iNtRON Biotechnology | Korea Shipbuilding vs. Mirai Semiconductors Co | Korea Shipbuilding vs. Eagle Veterinary Technology |
| Daewon Media vs. TK Chemical | Daewon Media vs. Sung Bo Chemicals | Daewon Media vs. Homecast CoLtd | Daewon Media vs. Korea Petro Chemical |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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