Correlation Between Kyung In and Digital Multimedia
Can any of the company-specific risk be diversified away by investing in both Kyung In and Digital Multimedia 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 Kyung In and Digital Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung In Synthetic Corp and Digital Multimedia Technology, you can compare the effects of market volatilities on Kyung In and Digital Multimedia 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 Kyung In with a short position of Digital Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung In and Digital Multimedia.
Diversification Opportunities for Kyung In and Digital Multimedia
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kyung and Digital is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kyung In Synthetic Corp and Digital Multimedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Multimedia and Kyung In 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 Kyung In Synthetic Corp are associated (or correlated) with Digital Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Multimedia has no effect on the direction of Kyung In i.e., Kyung In and Digital Multimedia go up and down completely randomly.
Pair Corralation between Kyung In and Digital Multimedia
Assuming the 90 days trading horizon Kyung In Synthetic Corp is expected to generate 0.51 times more return on investment than Digital Multimedia. However, Kyung In Synthetic Corp is 1.96 times less risky than Digital Multimedia. It trades about -0.12 of its potential returns per unit of risk. Digital Multimedia Technology is currently generating about -0.13 per unit of risk. If you would invest 298,000 in Kyung In Synthetic Corp on August 29, 2024 and sell it today you would lose (13,000) from holding Kyung In Synthetic Corp or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung In Synthetic Corp vs. Digital Multimedia Technology
Performance |
| Timeline |
| Kyung In Synthetic |
| Digital Multimedia |
Kyung In and Digital Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung In and Digital Multimedia
The main advantage of trading using opposite Kyung In and Digital Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung In position performs unexpectedly, Digital Multimedia 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 Digital Multimedia will offset losses from the drop in Digital Multimedia's long position.| Kyung In vs. Korean Reinsurance Co | Kyung In vs. Lotte Non Life Insurance | Kyung In vs. Hyosung Advanced Materials | Kyung In vs. DB Financial Investment |
| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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