Correlation Between Kukdong Oil and Nice Information
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Nice Information 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 Nice Information 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 Nice Information Telecommunication, you can compare the effects of market volatilities on Kukdong Oil and Nice Information 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 Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Nice Information.
Diversification Opportunities for Kukdong Oil and Nice Information
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kukdong and Nice is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel 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 Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Nice Information go up and down completely randomly.
Pair Corralation between Kukdong Oil and Nice Information
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to generate 0.39 times more return on investment than Nice Information. However, Kukdong Oil Chemicals is 2.56 times less risky than Nice Information. It trades about 0.18 of its potential returns per unit of risk. Nice Information Telecommunication is currently generating about 0.02 per unit of risk. If you would invest 343,000 in Kukdong Oil Chemicals on November 27, 2024 and sell it today you would earn a total of 6,000 from holding Kukdong Oil Chemicals or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Nice Information Telecommunica
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Nice Information Tel |
Kukdong Oil and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Nice Information
The main advantage of trading using opposite Kukdong Oil and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| Kukdong Oil vs. Sangsangin Investment Securities | Kukdong Oil vs. Ssangyong Materials Corp | Kukdong Oil vs. Golden Bridge Investment | Kukdong Oil vs. EBEST Investment Securities |
| Nice Information vs. Soulbrain Holdings Co | Nice Information vs. NICE Total Cash | Nice Information vs. Geumhwa Plant Service | Nice Information vs. AfreecaTV 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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