Correlation Between Korea Shipbuilding and Carriesoft
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and Carriesoft 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 Carriesoft 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 Carriesoft Co, you can compare the effects of market volatilities on Korea Shipbuilding and Carriesoft 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 Carriesoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Carriesoft.
Diversification Opportunities for Korea Shipbuilding and Carriesoft
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Carriesoft is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Carriesoft Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriesoft 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 Carriesoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriesoft has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and Carriesoft go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Carriesoft
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 1.09 times more return on investment than Carriesoft. However, Korea Shipbuilding is 1.09 times more volatile than Carriesoft Co. It trades about 0.22 of its potential returns per unit of risk. Carriesoft Co is currently generating about -0.32 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Carriesoft Co
Performance |
| Timeline |
| Korea Shipbuilding |
| Carriesoft |
Korea Shipbuilding and Carriesoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Carriesoft
The main advantage of trading using opposite Korea Shipbuilding and Carriesoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, Carriesoft 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 Carriesoft will offset losses from the drop in Carriesoft'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 |
| Carriesoft vs. Namhwa Industrial Co | Carriesoft vs. Next Entertainment World | Carriesoft vs. Tamul Multimedia Co | Carriesoft vs. Korea Shipbuilding Offshore |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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