Correlation Between Korean Drug and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both Korean Drug and KakaoBank Corp 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 KakaoBank Corp 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 KakaoBank Corp, you can compare the effects of market volatilities on Korean Drug and KakaoBank Corp 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Drug and KakaoBank Corp.
Diversification Opportunities for Korean Drug and KakaoBank Corp
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korean and KakaoBank is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Korean Drug Co and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Korean Drug i.e., Korean Drug and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Korean Drug and KakaoBank Corp
Assuming the 90 days trading horizon Korean Drug Co is expected to generate 1.8 times more return on investment than KakaoBank Corp. However, Korean Drug is 1.8 times more volatile than KakaoBank Corp. It trades about 0.21 of its potential returns per unit of risk. KakaoBank Corp is currently generating about -0.26 per unit of risk. If you would invest 425,957 in Korean Drug Co on October 12, 2024 and sell it today you would earn a total of 66,043 from holding Korean Drug Co or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Korean Drug Co vs. KakaoBank Corp
Performance |
| Timeline |
| Korean Drug |
| KakaoBank Corp |
Korean Drug and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Drug and KakaoBank Corp
The main advantage of trading using opposite Korean Drug and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Drug position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Korean Drug vs. Yura Tech Co | Korean Drug vs. Lotte Non Life Insurance | Korean Drug vs. SS TECH | Korean Drug vs. Samsung Publishing Co |
| KakaoBank Corp vs. Korean Drug Co | KakaoBank Corp vs. Nice Information Telecommunication | KakaoBank Corp vs. Daou Data Corp | KakaoBank Corp vs. Daishin Information Communications |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |