Correlation Between Kyung Chang and Samjin LND
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Samjin LND 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 Samjin LND 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 Samjin LND Co, you can compare the effects of market volatilities on Kyung Chang and Samjin LND 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 Samjin LND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Samjin LND.
Diversification Opportunities for Kyung Chang and Samjin LND
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyung and Samjin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Samjin LND Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samjin LND 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 Samjin LND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samjin LND has no effect on the direction of Kyung Chang i.e., Kyung Chang and Samjin LND go up and down completely randomly.
Pair Corralation between Kyung Chang and Samjin LND
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 1.31 times more return on investment than Samjin LND. However, Kyung Chang is 1.31 times more volatile than Samjin LND Co. It trades about 0.02 of its potential returns per unit of risk. Samjin LND Co is currently generating about -0.08 per unit of risk. If you would invest 207,000 in Kyung Chang Industrial on August 30, 2024 and sell it today you would lose (3,000) from holding Kyung Chang Industrial or give up 1.45% 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. Samjin LND Co
Performance |
| Timeline |
| Kyung Chang Industrial |
| Samjin LND |
Kyung Chang and Samjin LND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Samjin LND
The main advantage of trading using opposite Kyung Chang and Samjin LND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Samjin LND 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 Samjin LND will offset losses from the drop in Samjin LND's long position.| Kyung Chang vs. Kisan Telecom Co | Kyung Chang vs. Seohee Construction Co | Kyung Chang vs. Nable Communications | Kyung Chang vs. Hanshin Construction Co |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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