Correlation Between Korea Information and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Korea Information and Kukil Metal 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 Korea Information and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Kukil Metal Co, you can compare the effects of market volatilities on Korea Information and Kukil Metal 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 Korea Information with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Kukil Metal.
Diversification Opportunities for Korea Information and Kukil Metal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Kukil is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and Korea Information 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 Korea Information Communications are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Korea Information i.e., Korea Information and Kukil Metal go up and down completely randomly.
Pair Corralation between Korea Information and Kukil Metal
Assuming the 90 days trading horizon Korea Information Communications is expected to under-perform the Kukil Metal. But the stock apears to be less risky and, when comparing its historical volatility, Korea Information Communications is 1.82 times less risky than Kukil Metal. The stock trades about -0.02 of its potential returns per unit of risk. The Kukil Metal Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 240,215 in Kukil Metal Co on September 24, 2024 and sell it today you would lose (67,615) from holding Kukil Metal Co or give up 28.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Kukil Metal Co
Performance |
| Timeline |
| Korea Information |
| Kukil Metal |
Korea Information and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Kukil Metal
The main advantage of trading using opposite Korea Information and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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