Correlation Between Korea Alcohol and LabGenomics
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol and LabGenomics 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 Alcohol and LabGenomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Alcohol Industrial and LabGenomics Co, you can compare the effects of market volatilities on Korea Alcohol and LabGenomics 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 Alcohol with a short position of LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and LabGenomics.
Diversification Opportunities for Korea Alcohol and LabGenomics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and LabGenomics is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics and Korea Alcohol 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 Alcohol Industrial are associated (or correlated) with LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of Korea Alcohol i.e., Korea Alcohol and LabGenomics go up and down completely randomly.
Pair Corralation between Korea Alcohol and LabGenomics
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to generate 0.56 times more return on investment than LabGenomics. However, Korea Alcohol Industrial is 1.77 times less risky than LabGenomics. It trades about -0.29 of its potential returns per unit of risk. LabGenomics Co is currently generating about -0.19 per unit of risk. If you would invest 904,000 in Korea Alcohol Industrial on September 12, 2024 and sell it today you would lose (118,000) from holding Korea Alcohol Industrial or give up 13.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. LabGenomics Co
Performance |
| Timeline |
| Korea Alcohol Industrial |
| LabGenomics |
Korea Alcohol and LabGenomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and LabGenomics
The main advantage of trading using opposite Korea Alcohol and LabGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol position performs unexpectedly, LabGenomics 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 LabGenomics will offset losses from the drop in LabGenomics' long position.| Korea Alcohol vs. Innowireless Co | Korea Alcohol vs. Wireless Power Amplifier | Korea Alcohol vs. Sangsangin Investment Securities | Korea Alcohol vs. Nable Communications |
| LabGenomics vs. Samsung Life Insurance | LabGenomics vs. Golden Bridge Investment | LabGenomics vs. Woori Technology Investment | LabGenomics vs. Koryo Credit Information |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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