Correlation Between Kyung Chang and N Citron
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and N Citron 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 N Citron 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 N Citron, you can compare the effects of market volatilities on Kyung Chang and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and N Citron.
Diversification Opportunities for Kyung Chang and N Citron
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyung and 101400 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of Kyung Chang i.e., Kyung Chang and N Citron go up and down completely randomly.
Pair Corralation between Kyung Chang and N Citron
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to under-perform the N Citron. In addition to that, Kyung Chang is 1.1 times more volatile than N Citron. It trades about -0.32 of its total potential returns per unit of risk. N Citron is currently generating about -0.09 per unit of volatility. If you would invest 41,400 in N Citron on September 4, 2024 and sell it today you would lose (1,400) from holding N Citron or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kyung Chang Industrial vs. N Citron
Performance |
| Timeline |
| Kyung Chang Industrial |
| N Citron |
Kyung Chang and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and N Citron
The main advantage of trading using opposite Kyung Chang and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron'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 |
| N Citron vs. Dongsin Engineering Construction | N Citron vs. Doosan Fuel Cell | N Citron vs. Daishin Balance 1 | N Citron 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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