Correlation Between Korea Shipbuilding and Moadata

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and Moadata 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 Moadata 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 Moadata Co, you can compare the effects of market volatilities on Korea Shipbuilding and Moadata 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 Moadata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Moadata.

Diversification Opportunities for Korea Shipbuilding and Moadata

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Korea and Moadata is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Moadata Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moadata 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 Moadata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moadata has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and Moadata go up and down completely randomly.

Pair Corralation between Korea Shipbuilding and Moadata

Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 0.9 times more return on investment than Moadata. However, Korea Shipbuilding Offshore is 1.11 times less risky than Moadata. It trades about 0.22 of its potential returns per unit of risk. Moadata Co is currently generating about -0.07 per unit of risk. If you would invest  19,050,000  in Korea Shipbuilding Offshore on August 29, 2024 and sell it today you would earn a total of  2,550,000  from holding Korea Shipbuilding Offshore or generate 13.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Korea Shipbuilding Offshore  vs.  Moadata Co

 Performance 
       Timeline  
Korea Shipbuilding 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Korea Shipbuilding Offshore are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Korea Shipbuilding sustained solid returns over the last few months and may actually be approaching a breakup point.
Moadata 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Moadata Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Moadata is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Korea Shipbuilding and Moadata Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Korea Shipbuilding and Moadata

The main advantage of trading using opposite Korea Shipbuilding and Moadata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, Moadata 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 Moadata will offset losses from the drop in Moadata's long position.
The idea behind Korea Shipbuilding Offshore and Moadata Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities