Correlation Between Kyung Chang and Haesung Optics
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Haesung Optics 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 Haesung Optics 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 Haesung Optics Co, you can compare the effects of market volatilities on Kyung Chang and Haesung Optics 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 Haesung Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Haesung Optics.
Diversification Opportunities for Kyung Chang and Haesung Optics
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kyung and Haesung is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Haesung Optics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Optics 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 Haesung Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Optics has no effect on the direction of Kyung Chang i.e., Kyung Chang and Haesung Optics go up and down completely randomly.
Pair Corralation between Kyung Chang and Haesung Optics
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to under-perform the Haesung Optics. But the stock apears to be less risky and, when comparing its historical volatility, Kyung Chang Industrial is 1.64 times less risky than Haesung Optics. The stock trades about -0.17 of its potential returns per unit of risk. The Haesung Optics Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 99,100 in Haesung Optics Co on November 28, 2024 and sell it today you would earn a total of 1,500 from holding Haesung Optics Co or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung Chang Industrial vs. Haesung Optics Co
Performance |
| Timeline |
| Kyung Chang Industrial |
| Haesung Optics |
Kyung Chang and Haesung Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Haesung Optics
The main advantage of trading using opposite Kyung Chang and Haesung Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Haesung Optics 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 Haesung Optics will offset losses from the drop in Haesung Optics' long position.| Kyung Chang vs. Insun Environment New | Kyung Chang vs. Daejung Chemicals Metals | Kyung Chang vs. Samhyun Steel Co | Kyung Chang vs. Finebesteel |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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