Correlation Between Korea Shipbuilding and Microfriend
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and Microfriend 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 Microfriend 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 Microfriend, you can compare the effects of market volatilities on Korea Shipbuilding and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Microfriend.
Diversification Opportunities for Korea Shipbuilding and Microfriend
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Microfriend is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and Microfriend go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Microfriend
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 0.97 times more return on investment than Microfriend. However, Korea Shipbuilding Offshore is 1.03 times less risky than Microfriend. It trades about 0.02 of its potential returns per unit of risk. Microfriend is currently generating about -0.18 per unit of risk. If you would invest 23,100,000 in Korea Shipbuilding Offshore on November 3, 2024 and sell it today you would earn a total of 100,000 from holding Korea Shipbuilding Offshore or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Microfriend
Performance |
| Timeline |
| Korea Shipbuilding |
| Microfriend |
Korea Shipbuilding and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Microfriend
The main advantage of trading using opposite Korea Shipbuilding and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Korea Shipbuilding vs. Woori Technology Investment | Korea Shipbuilding vs. Barunson Entertainment Arts | Korea Shipbuilding vs. SAMG Entertainment Co | Korea Shipbuilding vs. SBI Investment KOREA |
| Microfriend vs. Samyang Foods Co | Microfriend vs. KEPCO Engineering Construction | Microfriend vs. Daewoo Engineering Construction | Microfriend vs. Alton Sports CoLtd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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