Correlation Between Korea Alcohol and PH Tech
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol and PH Tech 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 PH Tech 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 PH Tech Co, you can compare the effects of market volatilities on Korea Alcohol and PH Tech 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 PH Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and PH Tech.
Diversification Opportunities for Korea Alcohol and PH Tech
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Korea and 239890 is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH Tech 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 PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of Korea Alcohol i.e., Korea Alcohol and PH Tech go up and down completely randomly.
Pair Corralation between Korea Alcohol and PH Tech
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to under-perform the PH Tech. But the stock apears to be less risky and, when comparing its historical volatility, Korea Alcohol Industrial is 2.68 times less risky than PH Tech. The stock trades about -0.14 of its potential returns per unit of risk. The PH Tech Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 686,000 in PH Tech Co on August 25, 2024 and sell it today you would earn a total of 103,000 from holding PH Tech Co or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. PH Tech Co
Performance |
| Timeline |
| Korea Alcohol Industrial |
| PH Tech |
Korea Alcohol and PH Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and PH Tech
The main advantage of trading using opposite Korea Alcohol and PH Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol position performs unexpectedly, PH Tech 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 PH Tech will offset losses from the drop in PH Tech's long position.| Korea Alcohol vs. LG Chemicals | Korea Alcohol vs. POSCO Holdings | Korea Alcohol vs. Lotte Chemical Corp | Korea Alcohol vs. Hyundai Steel |
| PH Tech vs. LG Chem | PH Tech vs. Hyosung Chemical Corp | PH Tech vs. LIG ES SPAC | PH Tech vs. Sukgyung AT 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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