Correlation Between Korea Shipbuilding and Neungyule Education
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and Neungyule Education 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 Neungyule Education 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 Neungyule Education, you can compare the effects of market volatilities on Korea Shipbuilding and Neungyule Education 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 Neungyule Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Neungyule Education.
Diversification Opportunities for Korea Shipbuilding and Neungyule Education
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Neungyule is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Neungyule Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neungyule Education 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 Neungyule Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neungyule Education has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and Neungyule Education go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Neungyule Education
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to under-perform the Neungyule Education. But the stock apears to be less risky and, when comparing its historical volatility, Korea Shipbuilding Offshore is 1.57 times less risky than Neungyule Education. The stock trades about -0.06 of its potential returns per unit of risk. The Neungyule Education is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 386,000 in Neungyule Education on November 9, 2024 and sell it today you would earn a total of 9,500 from holding Neungyule Education or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Neungyule Education
Performance |
| Timeline |
| Korea Shipbuilding |
| Neungyule Education |
Korea Shipbuilding and Neungyule Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Neungyule Education
The main advantage of trading using opposite Korea Shipbuilding and Neungyule Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, Neungyule Education 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 Neungyule Education will offset losses from the drop in Neungyule Education's long position.| Korea Shipbuilding vs. A Tech Solution Co | Korea Shipbuilding vs. Daewoo Engineering Construction | Korea Shipbuilding vs. Dongbang Ship Machinery | Korea Shipbuilding vs. Nam Hwa Construction |
| Neungyule Education vs. GS Retail Co | Neungyule Education vs. Songwon Industrial Co | Neungyule Education vs. Daejung Chemicals Metals | Neungyule Education vs. CKH Food Health |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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