Correlation Between Korean Drug and Okins Electronics
Can any of the company-specific risk be diversified away by investing in both Korean Drug and Okins Electronics 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 Okins Electronics 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 Okins Electronics Co, you can compare the effects of market volatilities on Korean Drug and Okins Electronics 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 Okins Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and Okins Electronics.
Diversification Opportunities for Korean Drug and Okins Electronics
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korean and Okins is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and Okins Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okins Electronics 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 Okins Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okins Electronics has no effect on the direction of Korean Drug i.e., Korean Drug and Okins Electronics go up and down completely randomly.
Pair Corralation between Korean Drug and Okins Electronics
Assuming the 90 days trading horizon Korean Drug Co is expected to generate 0.67 times more return on investment than Okins Electronics. However, Korean Drug Co is 1.49 times less risky than Okins Electronics. It trades about -0.22 of its potential returns per unit of risk. Okins Electronics Co is currently generating about -0.54 per unit of risk. If you would invest 488,000 in Korean Drug Co on August 29, 2024 and sell it today you would lose (30,000) from holding Korean Drug Co or give up 6.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Drug Co vs. Okins Electronics Co
Performance |
| Timeline |
| Korean Drug |
| Okins Electronics |
Korean Drug and Okins Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and Okins Electronics
The main advantage of trading using opposite Korean Drug and Okins Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug position performs unexpectedly, Okins Electronics 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 Okins Electronics will offset losses from the drop in Okins Electronics' long position.| Korean Drug vs. Aminologics CoLtd | Korean Drug vs. Withuspharmaceutical CoLtd | Korean Drug vs. High Tech Pharm |
| Okins Electronics vs. Korea Real Estate | Okins Electronics vs. Korea Ratings Co | Okins Electronics vs. IQuest Co | Okins Electronics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |