Correlation Between Kukdong Oil and Han Kook
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Han Kook 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 Han Kook 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 Han Kook Capital, you can compare the effects of market volatilities on Kukdong Oil and Han Kook 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 Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Han Kook.
Diversification Opportunities for Kukdong Oil and Han Kook
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kukdong and Han is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Han Kook Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Capital 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 Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Capital has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Han Kook go up and down completely randomly.
Pair Corralation between Kukdong Oil and Han Kook
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the Han Kook. But the stock apears to be less risky and, when comparing its historical volatility, Kukdong Oil Chemicals is 1.12 times less risky than Han Kook. The stock trades about -0.33 of its potential returns per unit of risk. The Han Kook Capital is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 55,900 in Han Kook Capital on September 5, 2024 and sell it today you would lose (600.00) from holding Han Kook Capital or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Han Kook Capital
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Han Kook Capital |
Kukdong Oil and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Han Kook
The main advantage of trading using opposite Kukdong Oil and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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