Correlation Between Korean Drug and Ezwelfare
Can any of the company-specific risk be diversified away by investing in both Korean Drug and Ezwelfare 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 Ezwelfare 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 Ezwelfare Co, you can compare the effects of market volatilities on Korean Drug and Ezwelfare 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 Ezwelfare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and Ezwelfare.
Diversification Opportunities for Korean Drug and Ezwelfare
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korean and Ezwelfare is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and Ezwelfare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ezwelfare 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 Ezwelfare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ezwelfare has no effect on the direction of Korean Drug i.e., Korean Drug and Ezwelfare go up and down completely randomly.
Pair Corralation between Korean Drug and Ezwelfare
Assuming the 90 days trading horizon Korean Drug Co is expected to generate 1.61 times more return on investment than Ezwelfare. However, Korean Drug is 1.61 times more volatile than Ezwelfare Co. It trades about 0.19 of its potential returns per unit of risk. Ezwelfare Co is currently generating about -0.12 per unit of risk. If you would invest 455,968 in Korean Drug Co on October 25, 2024 and sell it today you would earn a total of 28,032 from holding Korean Drug Co or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Drug Co vs. Ezwelfare Co
Performance |
| Timeline |
| Korean Drug |
| Ezwelfare |
Korean Drug and Ezwelfare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and Ezwelfare
The main advantage of trading using opposite Korean Drug and Ezwelfare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug position performs unexpectedly, Ezwelfare 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 Ezwelfare will offset losses from the drop in Ezwelfare's long position.| Korean Drug vs. Kolon Life Science | Korean Drug vs. JETEMA Co | Korean Drug vs. AnterogenCoLtd | Korean Drug vs. Busan Industrial Co |
| Ezwelfare vs. Orbitech Co | Ezwelfare vs. Narae Nanotech Corp | Ezwelfare vs. RFTech Co | Ezwelfare vs. Hankukpackage 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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