Correlation Between Korea Zinc and Korea Aerospace
Can any of the company-specific risk be diversified away by investing in both Korea Zinc and Korea Aerospace 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 Zinc and Korea Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Zinc and Korea Aerospace Industries, you can compare the effects of market volatilities on Korea Zinc and Korea Aerospace 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 Zinc with a short position of Korea Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Zinc and Korea Aerospace.
Diversification Opportunities for Korea Zinc and Korea Aerospace
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Korea is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Korea Zinc and Korea Aerospace Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Aerospace Indu and Korea Zinc 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 Zinc are associated (or correlated) with Korea Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Aerospace Indu has no effect on the direction of Korea Zinc i.e., Korea Zinc and Korea Aerospace go up and down completely randomly.
Pair Corralation between Korea Zinc and Korea Aerospace
Assuming the 90 days trading horizon Korea Zinc is expected to generate 1.05 times more return on investment than Korea Aerospace. However, Korea Zinc is 1.05 times more volatile than Korea Aerospace Industries. It trades about 0.06 of its potential returns per unit of risk. Korea Aerospace Industries is currently generating about 0.03 per unit of risk. If you would invest 50,215,800 in Korea Zinc on November 27, 2024 and sell it today you would earn a total of 31,484,200 from holding Korea Zinc or generate 62.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Zinc vs. Korea Aerospace Industries
Performance |
| Timeline |
| Korea Zinc |
| Korea Aerospace Indu |
Korea Zinc and Korea Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Zinc and Korea Aerospace
The main advantage of trading using opposite Korea Zinc and Korea Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Zinc position performs unexpectedly, Korea Aerospace 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 Aerospace will offset losses from the drop in Korea Aerospace's long position.| Korea Zinc vs. Fine Besteel Co | Korea Zinc vs. Husteel | Korea Zinc vs. Hyundai BNG Steel | Korea Zinc vs. GS Retail Co |
| Korea Aerospace vs. LB Investment | Korea Aerospace vs. Nable Communications | Korea Aerospace vs. KT Submarine Telecom | Korea Aerospace vs. Nice Information Telecommunication |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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