Correlation Between Korea Electric and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Wireless Power 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 Wireless Power 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 Wireless Power Amplifier, you can compare the effects of market volatilities on Korea Electric and Wireless Power 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 Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Wireless Power.
Diversification Opportunities for Korea Electric and Wireless Power
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Wireless is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier 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 Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Korea Electric i.e., Korea Electric and Wireless Power go up and down completely randomly.
Pair Corralation between Korea Electric and Wireless Power
Assuming the 90 days trading horizon Korea Electric is expected to generate 4.89 times less return on investment than Wireless Power. But when comparing it to its historical volatility, Korea Electric Power is 6.29 times less risky than Wireless Power. It trades about 0.33 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 295,500 in Wireless Power Amplifier on November 1, 2024 and sell it today you would earn a total of 106,500 from holding Wireless Power Amplifier or generate 36.04% 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. Wireless Power Amplifier
Performance |
| Timeline |
| Korea Electric Power |
| Wireless Power Amplifier |
Korea Electric and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Wireless Power
The main advantage of trading using opposite Korea Electric and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.| Korea Electric vs. Korea Steel Co | Korea Electric vs. SK Chemicals Co | Korea Electric vs. Insun Environment New | Korea Electric vs. YeaRimDang Publishing Co |
| Wireless Power vs. TOPMATERIAL LTD | Wireless Power vs. Hannong Chemicals | Wireless Power vs. Hana Materials | Wireless Power vs. Kukdong Oil Chemicals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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