Correlation Between Korea Electric and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Stic Investments 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 Stic Investments 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 Stic Investments, you can compare the effects of market volatilities on Korea Electric and Stic Investments 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 Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Stic Investments.
Diversification Opportunities for Korea Electric and Stic Investments
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Stic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments 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 Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Korea Electric i.e., Korea Electric and Stic Investments go up and down completely randomly.
Pair Corralation between Korea Electric and Stic Investments
Assuming the 90 days trading horizon Korea Electric Power is expected to generate 1.01 times more return on investment than Stic Investments. However, Korea Electric is 1.01 times more volatile than Stic Investments. It trades about 0.02 of its potential returns per unit of risk. Stic Investments is currently generating about -0.27 per unit of risk. If you would invest 2,070,000 in Korea Electric Power on October 23, 2024 and sell it today you would earn a total of 5,000 from holding Korea Electric Power or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. Stic Investments
Performance |
| Timeline |
| Korea Electric Power |
| Stic Investments |
Korea Electric and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Stic Investments
The main advantage of trading using opposite Korea Electric and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Korea Electric vs. Dong A Steel Technology | Korea Electric vs. PJ Metal Co | Korea Electric vs. Songwon Industrial Co | Korea Electric vs. Eagon Industrial Co |
| Stic Investments vs. InfoBank | Stic Investments vs. Korean Reinsurance Co | Stic Investments vs. Industrial Bank | Stic Investments vs. KTB Investment Securities |
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 | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |