Correlation Between Kukdong Oil and Korea Information
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Korea 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 Korea 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 Korea Information Engineering, you can compare the effects of market volatilities on Kukdong Oil and Korea 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Korea Information.
Diversification Opportunities for Kukdong Oil and Korea Information
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukdong and Korea is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Korea Information go up and down completely randomly.
Pair Corralation between Kukdong Oil and Korea Information
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to generate 0.44 times more return on investment than Korea Information. However, Kukdong Oil Chemicals is 2.27 times less risky than Korea Information. It trades about -0.14 of its potential returns per unit of risk. Korea Information Engineering is currently generating about -0.24 per unit of risk. If you would invest 371,000 in Kukdong Oil Chemicals on August 28, 2024 and sell it today you would lose (8,500) from holding Kukdong Oil Chemicals or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Korea Information Engineering
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Korea Information |
Kukdong Oil and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Korea Information
The main advantage of trading using opposite Kukdong Oil and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Korea 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 Korea Information will offset losses from the drop in Korea Information's long position.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
| Korea Information vs. Korea Real Estate | Korea Information vs. Korea Ratings Co | Korea Information vs. IQuest Co | Korea Information vs. Wonbang Tech 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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