Correlation Between Korea Shipbuilding and N Citron
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and N Citron 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 N Citron 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 N Citron, you can compare the effects of market volatilities on Korea Shipbuilding and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and N Citron.
Diversification Opportunities for Korea Shipbuilding and N Citron
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and 101400 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and N Citron go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and N Citron
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.79 times more return on investment than N Citron. However, Korea Shipbuilding is 1.79 times more volatile than N Citron. It trades about 0.22 of its potential returns per unit of risk. N Citron is currently generating about -0.09 per unit of risk. If you would invest 18,070,000 in Korea Shipbuilding Offshore on September 3, 2024 and sell it today you would earn a total of 2,380,000 from holding Korea Shipbuilding Offshore or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. N Citron
Performance |
| Timeline |
| Korea Shipbuilding |
| N Citron |
Korea Shipbuilding and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and N Citron
The main advantage of trading using opposite Korea Shipbuilding and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron's long position.| Korea Shipbuilding vs. LG Display | Korea Shipbuilding vs. Hyundai Motor | Korea Shipbuilding vs. Hyundai Motor Co | Korea Shipbuilding vs. Hyundai Motor Co |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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