Correlation Between Korea Alcohol and COWINTECH
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol and COWINTECH 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 COWINTECH 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 COWINTECH Co, you can compare the effects of market volatilities on Korea Alcohol and COWINTECH 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 COWINTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and COWINTECH.
Diversification Opportunities for Korea Alcohol and COWINTECH
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and COWINTECH is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and COWINTECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COWINTECH 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 COWINTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COWINTECH has no effect on the direction of Korea Alcohol i.e., Korea Alcohol and COWINTECH go up and down completely randomly.
Pair Corralation between Korea Alcohol and COWINTECH
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to under-perform the COWINTECH. But the stock apears to be less risky and, when comparing its historical volatility, Korea Alcohol Industrial is 4.85 times less risky than COWINTECH. The stock trades about -0.18 of its potential returns per unit of risk. The COWINTECH Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,478,000 in COWINTECH Co on August 29, 2024 and sell it today you would lose (7,000) from holding COWINTECH Co or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. COWINTECH Co
Performance |
| Timeline |
| Korea Alcohol Industrial |
| COWINTECH |
Korea Alcohol and COWINTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and COWINTECH
The main advantage of trading using opposite Korea Alcohol and COWINTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol position performs unexpectedly, COWINTECH 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 COWINTECH will offset losses from the drop in COWINTECH's long position.| Korea Alcohol vs. Kbi Metal Co | Korea Alcohol vs. Lindeman Asia Investment | Korea Alcohol vs. DB Financial Investment | Korea Alcohol vs. Eugene Investment Securities |
| COWINTECH vs. Shinsegae Food | COWINTECH vs. CJ Seafood Corp | COWINTECH vs. Lotte Non Life Insurance | COWINTECH vs. Seoul Food Industrial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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