Correlation Between Korea Electric and Booster
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Booster 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 Korea Electric and Booster into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Electric Power and Booster Co, you can compare the effects of market volatilities on Korea Electric and Booster 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 Korea Electric with a short position of Booster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Booster.
Diversification Opportunities for Korea Electric and Booster
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Booster is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Booster Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booster and Korea Electric 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 Korea Electric Power are associated (or correlated) with Booster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booster has no effect on the direction of Korea Electric i.e., Korea Electric and Booster go up and down completely randomly.
Pair Corralation between Korea Electric and Booster
Assuming the 90 days trading horizon Korea Electric Power is expected to generate 1.83 times more return on investment than Booster. However, Korea Electric is 1.83 times more volatile than Booster Co. It trades about 0.01 of its potential returns per unit of risk. Booster Co is currently generating about -0.06 per unit of risk. If you would invest 2,150,000 in Korea Electric Power on September 13, 2024 and sell it today you would lose (5,000) from holding Korea Electric Power or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. Booster Co
Performance |
| Timeline |
| Korea Electric Power |
| Booster |
Korea Electric and Booster Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Booster
The main advantage of trading using opposite Korea Electric and Booster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Booster 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 Booster will offset losses from the drop in Booster's long position.| Korea Electric vs. Samyang Foods Co | Korea Electric vs. Haitai Confectionery Foods | Korea Electric vs. Automobile Pc | Korea Electric vs. CKH Food Health |
| Booster vs. Lotte Chilsung Beverage | Booster vs. Kyeryong Construction Industrial | Booster vs. Woorim Machinery Co | Booster vs. Hanshin Construction 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 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..
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