Correlation Between Playgram and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Playgram and Korea Alcohol 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 Playgram and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playgram Co and Korea Alcohol Industrial, you can compare the effects of market volatilities on Playgram and Korea Alcohol 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 Playgram with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playgram and Korea Alcohol.
Diversification Opportunities for Playgram and Korea Alcohol
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Playgram and Korea is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Playgram Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and Playgram 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 Playgram Co are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Playgram i.e., Playgram and Korea Alcohol go up and down completely randomly.
Pair Corralation between Playgram and Korea Alcohol
Assuming the 90 days trading horizon Playgram Co is expected to generate 3.87 times more return on investment than Korea Alcohol. However, Playgram is 3.87 times more volatile than Korea Alcohol Industrial. It trades about 0.03 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.12 per unit of risk. If you would invest 36,700 in Playgram Co on August 31, 2024 and sell it today you would earn a total of 200.00 from holding Playgram Co or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Playgram Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Playgram |
| Korea Alcohol Industrial |
Playgram and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playgram and Korea Alcohol
The main advantage of trading using opposite Playgram and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playgram position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Playgram vs. LG Chemicals | Playgram vs. POSCO Holdings | Playgram vs. Hanwha Solutions | Playgram vs. Lotte Chemical Corp |
| Korea Alcohol vs. Homecast CoLtd | Korea Alcohol vs. Genie Music | Korea Alcohol vs. Jeju Air Co | Korea Alcohol vs. Cuckoo Homesys Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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