Correlation Between Kyung Chang and Korea Information
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Korea Information 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 Korea Information 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 Korea Information Engineering, you can compare the effects of market volatilities on Kyung Chang and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Korea Information.
Diversification Opportunities for Kyung Chang and Korea Information
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyung and Korea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Kyung Chang i.e., Kyung Chang and Korea Information go up and down completely randomly.
Pair Corralation between Kyung Chang and Korea Information
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 1.19 times more return on investment than Korea Information. However, Kyung Chang is 1.19 times more volatile than Korea Information Engineering. It trades about -0.32 of its potential returns per unit of risk. Korea Information Engineering is currently generating about -0.39 per unit of risk. If you would invest 222,000 in Kyung Chang Industrial on September 4, 2024 and sell it today you would lose (26,300) from holding Kyung Chang Industrial or give up 11.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. Korea Information Engineering
Performance |
| Timeline |
| Kyung Chang Industrial |
| Korea Information |
Kyung Chang and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Korea Information
The main advantage of trading using opposite Kyung Chang and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Kyung Chang vs. Shinil Electronics Co | Kyung Chang vs. Korean Reinsurance Co | Kyung Chang vs. Daejoo Electronic Materials | Kyung Chang vs. Samyoung Electronics Co |
| Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |