Correlation Between Korean Drug and Inzi Display
Can any of the company-specific risk be diversified away by investing in both Korean Drug and Inzi Display 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 Inzi Display 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 Inzi Display CoLtd, you can compare the effects of market volatilities on Korean Drug and Inzi Display 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 Inzi Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and Inzi Display.
Diversification Opportunities for Korean Drug and Inzi Display
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Korean and Inzi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and Inzi Display CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inzi Display CoLtd 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 Inzi Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inzi Display CoLtd has no effect on the direction of Korean Drug i.e., Korean Drug and Inzi Display go up and down completely randomly.
Pair Corralation between Korean Drug and Inzi Display
Assuming the 90 days trading horizon Korean Drug Co is expected to generate 1.23 times more return on investment than Inzi Display. However, Korean Drug is 1.23 times more volatile than Inzi Display CoLtd. It trades about -0.09 of its potential returns per unit of risk. Inzi Display CoLtd is currently generating about -0.12 per unit of risk. If you would invest 622,000 in Korean Drug Co on September 1, 2024 and sell it today you would lose (166,000) from holding Korean Drug Co or give up 26.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Drug Co vs. Inzi Display CoLtd
Performance |
| Timeline |
| Korean Drug |
| Inzi Display CoLtd |
Korean Drug and Inzi Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and Inzi Display
The main advantage of trading using opposite Korean Drug and Inzi Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug position performs unexpectedly, Inzi Display 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 Inzi Display will offset losses from the drop in Inzi Display's long position.| Korean Drug vs. Digital Power Communications | Korean Drug vs. Grand Korea Leisure | Korean Drug vs. ITM Semiconductor Co | Korean Drug vs. Shinsegae Information Communication |
| Inzi Display vs. Sempio Foods Co | Inzi Display vs. Daol Investment Securities | Inzi Display vs. Samlip General Foods | Inzi Display vs. CU Medical Systems |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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