Correlation Between Kyung Chang and Signetics
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Signetics 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 Kyung Chang and Signetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and Signetics, you can compare the effects of market volatilities on Kyung Chang and Signetics 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 Kyung Chang with a short position of Signetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Signetics.
Diversification Opportunities for Kyung Chang and Signetics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kyung and Signetics is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Signetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signetics and Kyung Chang 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 Kyung Chang Industrial are associated (or correlated) with Signetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signetics has no effect on the direction of Kyung Chang i.e., Kyung Chang and Signetics go up and down completely randomly.
Pair Corralation between Kyung Chang and Signetics
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 0.85 times more return on investment than Signetics. However, Kyung Chang Industrial is 1.18 times less risky than Signetics. It trades about 0.01 of its potential returns per unit of risk. Signetics is currently generating about 0.0 per unit of risk. If you would invest 216,397 in Kyung Chang Industrial on November 27, 2024 and sell it today you would lose (24,897) from holding Kyung Chang Industrial or give up 11.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. Signetics
Performance |
| Timeline |
| Kyung Chang Industrial |
| Signetics |
Kyung Chang and Signetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Signetics
The main advantage of trading using opposite Kyung Chang and Signetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Signetics 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 Signetics will offset losses from the drop in Signetics' long position.| Kyung Chang vs. Vitzro Tech Co | Kyung Chang vs. Hanyang Digitech Co | Kyung Chang vs. KMH Hitech Co | Kyung Chang vs. YG Entertainment |
| Signetics vs. Daishin Information Communications | Signetics vs. Display Tech Co | Signetics vs. Digital Power Communications | Signetics vs. Nice Information Telecommunication |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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