Correlation Between Korea Alcohol and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol and NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology Co, you can compare the effects of market volatilities on Korea Alcohol and NewFlex Technology 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 NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and NewFlex Technology.
Diversification Opportunities for Korea Alcohol and NewFlex Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and NewFlex is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology 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 NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Korea Alcohol i.e., Korea Alcohol and NewFlex Technology go up and down completely randomly.
Pair Corralation between Korea Alcohol and NewFlex Technology
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to generate 0.34 times more return on investment than NewFlex Technology. However, Korea Alcohol Industrial is 2.9 times less risky than NewFlex Technology. It trades about -0.09 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.09 per unit of risk. If you would invest 1,129,000 in Korea Alcohol Industrial on August 28, 2024 and sell it today you would lose (265,000) from holding Korea Alcohol Industrial or give up 23.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.5% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. NewFlex Technology Co
Performance |
| Timeline |
| Korea Alcohol Industrial |
| NewFlex Technology |
Korea Alcohol and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and NewFlex Technology
The main advantage of trading using opposite Korea Alcohol and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Korea Alcohol vs. Sungchang Autotech Co | Korea Alcohol vs. RFTech Co | Korea Alcohol vs. INFINITT Healthcare Co | Korea Alcohol vs. POSCO M TECH Co |
| NewFlex Technology vs. Hanwha InvestmentSecurities Co | NewFlex Technology vs. SBI Investment KOREA | NewFlex Technology vs. Samyung Trading Co | NewFlex Technology vs. Korea Air Svc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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