Correlation Between LEADCORP and Korea Computer
Can any of the company-specific risk be diversified away by investing in both LEADCORP and Korea Computer 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 LEADCORP and Korea Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The LEADCORP and Korea Computer, you can compare the effects of market volatilities on LEADCORP and Korea Computer 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 LEADCORP with a short position of Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEADCORP and Korea Computer.
Diversification Opportunities for LEADCORP and Korea Computer
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LEADCORP and Korea is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding The LEADCORP and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer and LEADCORP 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 The LEADCORP are associated (or correlated) with Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of LEADCORP i.e., LEADCORP and Korea Computer go up and down completely randomly.
Pair Corralation between LEADCORP and Korea Computer
Assuming the 90 days trading horizon The LEADCORP is expected to generate 0.84 times more return on investment than Korea Computer. However, The LEADCORP is 1.19 times less risky than Korea Computer. It trades about 0.27 of its potential returns per unit of risk. Korea Computer is currently generating about -0.12 per unit of risk. If you would invest 387,000 in The LEADCORP on November 28, 2024 and sell it today you would earn a total of 19,000 from holding The LEADCORP or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The LEADCORP vs. Korea Computer
Performance |
| Timeline |
| LEADCORP |
| Korea Computer |
LEADCORP and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEADCORP and Korea Computer
The main advantage of trading using opposite LEADCORP and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEADCORP position performs unexpectedly, Korea Computer 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 Computer will offset losses from the drop in Korea Computer's long position.| LEADCORP vs. Taegu Broadcasting | LEADCORP vs. KakaoBank Corp | LEADCORP vs. Hana Financial | LEADCORP vs. Daishin Information Communications |
| Korea Computer vs. Koryo Credit Information | Korea Computer vs. Korea Information Engineering | Korea Computer vs. LG Household Healthcare | Korea Computer vs. Chorokbaem Healthcare 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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