Correlation Between Kukdong Oil and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on Kukdong Oil and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Finebesteel.
Diversification Opportunities for Kukdong Oil and Finebesteel
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kukdong and Finebesteel is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Finebesteel go up and down completely randomly.
Pair Corralation between Kukdong Oil and Finebesteel
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to generate 1.0 times more return on investment than Finebesteel. However, Kukdong Oil is 1.0 times more volatile than Finebesteel. It trades about 0.02 of its potential returns per unit of risk. Finebesteel is currently generating about -0.03 per unit of risk. If you would invest 337,442 in Kukdong Oil Chemicals on November 27, 2024 and sell it today you would earn a total of 11,558 from holding Kukdong Oil Chemicals or generate 3.43% 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. Finebesteel
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Finebesteel |
Kukdong Oil and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Finebesteel
The main advantage of trading using opposite Kukdong Oil and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel'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 |
| Finebesteel vs. Sejong Industrial | Finebesteel vs. Korean Reinsurance Co | Finebesteel vs. Songwon Industrial Co | Finebesteel vs. Choil Aluminum |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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