Correlation Between Kukdong Oil and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Myoung Shin 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 Kukdong Oil and Myoung Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and Myoung Shin Industrial, you can compare the effects of market volatilities on Kukdong Oil and Myoung Shin 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 Kukdong Oil with a short position of Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Myoung Shin.
Diversification Opportunities for Kukdong Oil and Myoung Shin
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kukdong and Myoung is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial and Kukdong Oil 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 Kukdong Oil Chemicals are associated (or correlated) with Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Myoung Shin go up and down completely randomly.
Pair Corralation between Kukdong Oil and Myoung Shin
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to generate 0.18 times more return on investment than Myoung Shin. However, Kukdong Oil Chemicals is 5.55 times less risky than Myoung Shin. It trades about -0.25 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.16 per unit of risk. If you would invest 372,500 in Kukdong Oil Chemicals on September 3, 2024 and sell it today you would lose (14,500) from holding Kukdong Oil Chemicals or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Myoung Shin Industrial
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Myoung Shin Industrial |
Kukdong Oil and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Myoung Shin
The main advantage of trading using opposite Kukdong Oil and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Kukdong Oil vs. PJ Metal Co | Kukdong Oil vs. Homecast CoLtd | Kukdong Oil vs. Sungmoon Electronics Co | Kukdong Oil vs. LG Electronics |
| Myoung Shin vs. Busan Industrial Co | Myoung Shin vs. UNISEM Co | Myoung Shin vs. RPBio Inc | Myoung Shin vs. Finebesteel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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