Correlation Between COWAY and Kuk Young
Can any of the company-specific risk be diversified away by investing in both COWAY and Kuk Young 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 COWAY and Kuk Young into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COWAY Co and Kuk Young GM, you can compare the effects of market volatilities on COWAY and Kuk Young 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 COWAY with a short position of Kuk Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of COWAY and Kuk Young.
Diversification Opportunities for COWAY and Kuk Young
Very good diversification
The 3 months correlation between COWAY and Kuk is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding COWAY Co and Kuk Young GM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuk Young GM and COWAY 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 COWAY Co are associated (or correlated) with Kuk Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuk Young GM has no effect on the direction of COWAY i.e., COWAY and Kuk Young go up and down completely randomly.
Pair Corralation between COWAY and Kuk Young
Assuming the 90 days trading horizon COWAY is expected to generate 1.38 times less return on investment than Kuk Young. But when comparing it to its historical volatility, COWAY Co is 1.61 times less risky than Kuk Young. It trades about 0.06 of its potential returns per unit of risk. Kuk Young GM is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 133,300 in Kuk Young GM on September 4, 2024 and sell it today you would earn a total of 58,400 from holding Kuk Young GM or generate 43.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COWAY Co vs. Kuk Young GM
Performance |
| Timeline |
| COWAY |
| Kuk Young GM |
COWAY and Kuk Young Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COWAY and Kuk Young
The main advantage of trading using opposite COWAY and Kuk Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COWAY position performs unexpectedly, Kuk Young 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 Kuk Young will offset losses from the drop in Kuk Young's long position.| COWAY vs. Samyang Foods Co | COWAY vs. DB Insurance Co | COWAY vs. Cuckoo Electronics Co | COWAY vs. Sunny Electronics Corp |
| Kuk Young vs. Dong A Steel Technology | Kuk Young vs. Korea Information Communications | Kuk Young vs. Mobileleader CoLtd | Kuk Young vs. Koh Young Technology |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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