Correlation Between Han Kook and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Han Kook and Kukdong Oil 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 Han Kook and Kukdong Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Han Kook Capital and Kukdong Oil Chemicals, you can compare the effects of market volatilities on Han Kook and Kukdong Oil 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 Han Kook with a short position of Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Kukdong Oil.
Diversification Opportunities for Han Kook and Kukdong Oil
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Han and Kukdong is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Capital and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals and Han Kook 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 Han Kook Capital are associated (or correlated) with Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Han Kook i.e., Han Kook and Kukdong Oil go up and down completely randomly.
Pair Corralation between Han Kook and Kukdong Oil
Assuming the 90 days trading horizon Han Kook Capital is expected to generate 0.76 times more return on investment than Kukdong Oil. However, Han Kook Capital is 1.31 times less risky than Kukdong Oil. It trades about 0.0 of its potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about -0.03 per unit of risk. If you would invest 57,381 in Han Kook Capital on September 4, 2024 and sell it today you would lose (2,581) from holding Han Kook Capital or give up 4.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Capital vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| Han Kook Capital |
| Kukdong Oil Chemicals |
Han Kook and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Kukdong Oil
The main advantage of trading using opposite Han Kook and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Han Kook vs. Kukdong Oil Chemicals | Han Kook vs. Daishin Information Communications | Han Kook vs. Sejong Telecom | Han Kook vs. Echomarketing CoLtd |
| Kukdong Oil vs. Daishin Information Communications | Kukdong Oil vs. GS Retail Co | Kukdong Oil vs. Korea Computer | Kukdong Oil vs. RF Materials 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |