Correlation Between Kyung Chang and Kyobo 3
Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Kyobo 3 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 Kyobo 3 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 Kyobo 3 SPAC, you can compare the effects of market volatilities on Kyung Chang and Kyobo 3 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 Kyobo 3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Kyobo 3.
Diversification Opportunities for Kyung Chang and Kyobo 3
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyung and Kyobo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kyung Chang Industrial and Kyobo 3 SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyobo 3 SPAC 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 Kyobo 3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyobo 3 SPAC has no effect on the direction of Kyung Chang i.e., Kyung Chang and Kyobo 3 go up and down completely randomly.
Pair Corralation between Kyung Chang and Kyobo 3
Assuming the 90 days trading horizon Kyung Chang Industrial is expected to generate 1.31 times more return on investment than Kyobo 3. However, Kyung Chang is 1.31 times more volatile than Kyobo 3 SPAC. It trades about -0.03 of its potential returns per unit of risk. Kyobo 3 SPAC is currently generating about -0.1 per unit of risk. If you would invest 328,500 in Kyung Chang Industrial on September 12, 2024 and sell it today you would lose (136,000) from holding Kyung Chang Industrial or give up 41.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Kyung Chang Industrial vs. Kyobo 3 SPAC
Performance |
| Timeline |
| Kyung Chang Industrial |
| Kyobo 3 SPAC |
Kyung Chang and Kyobo 3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung Chang and Kyobo 3
The main advantage of trading using opposite Kyung Chang and Kyobo 3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Kyobo 3 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 Kyobo 3 will offset losses from the drop in Kyobo 3's long position.| Kyung Chang vs. Korea Computer | Kyung Chang vs. SK Telecom Co | Kyung Chang vs. Inzi Display CoLtd | Kyung Chang vs. Korea Information Communications |
| Kyobo 3 vs. Miwon Chemical | Kyobo 3 vs. DataSolution | Kyobo 3 vs. Hansol Chemical Co | Kyobo 3 vs. Lotte Data Communication |
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 Stocks Directory module to find actively traded stocks across global markets.
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