Correlation Between Korean Drug and Pureun Mutual
Can any of the company-specific risk be diversified away by investing in both Korean Drug and Pureun Mutual 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 Korean Drug and Pureun Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korean Drug Co and Pureun Mutual Savings, you can compare the effects of market volatilities on Korean Drug and Pureun Mutual 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 Korean Drug with a short position of Pureun Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and Pureun Mutual.
Diversification Opportunities for Korean Drug and Pureun Mutual
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korean and Pureun is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and Pureun Mutual Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pureun Mutual Savings and Korean Drug 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 Korean Drug Co are associated (or correlated) with Pureun Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pureun Mutual Savings has no effect on the direction of Korean Drug i.e., Korean Drug and Pureun Mutual go up and down completely randomly.
Pair Corralation between Korean Drug and Pureun Mutual
Assuming the 90 days trading horizon Korean Drug Co is expected to under-perform the Pureun Mutual. But the stock apears to be less risky and, when comparing its historical volatility, Korean Drug Co is 1.6 times less risky than Pureun Mutual. The stock trades about -0.04 of its potential returns per unit of risk. The Pureun Mutual Savings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,103,150 in Pureun Mutual Savings on August 30, 2024 and sell it today you would lose (217,150) from holding Pureun Mutual Savings or give up 19.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Drug Co vs. Pureun Mutual Savings
Performance |
| Timeline |
| Korean Drug |
| Pureun Mutual Savings |
Korean Drug and Pureun Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and Pureun Mutual
The main advantage of trading using opposite Korean Drug and Pureun Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug position performs unexpectedly, Pureun Mutual 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 Pureun Mutual will offset losses from the drop in Pureun Mutual's long position.| Korean Drug vs. AnterogenCoLtd | Korean Drug vs. Busan Industrial Co | Korean Drug vs. Busan Ind | Korean Drug vs. Shinhan WTI Futures |
| Pureun Mutual vs. Cube Entertainment | Pureun Mutual vs. Dreamus Company | Pureun Mutual vs. LG Energy Solution | Pureun Mutual vs. Dongwon System |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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