Correlation Between Korea Information and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Korea Information and Dongkuk Structures 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 Dongkuk Structures 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 Dongkuk Structures Construction, you can compare the effects of market volatilities on Korea Information and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Dongkuk Structures.
Diversification Opportunities for Korea Information and Dongkuk Structures
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Dongkuk is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Korea Information i.e., Korea Information and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Korea Information and Dongkuk Structures
Assuming the 90 days trading horizon Korea Information Communications is expected to generate 0.91 times more return on investment than Dongkuk Structures. However, Korea Information Communications is 1.1 times less risky than Dongkuk Structures. It trades about -0.03 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.04 per unit of risk. If you would invest 1,216,000 in Korea Information Communications on October 13, 2024 and sell it today you would lose (398,000) from holding Korea Information Communications or give up 32.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Dongkuk Structures Constructio
Performance |
| Timeline |
| Korea Information |
| Dongkuk Structures |
Korea Information and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Dongkuk Structures
The main advantage of trading using opposite Korea Information and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.| Korea Information vs. Lotte Data Communication | Korea Information vs. Digital Power Communications | Korea Information vs. Kisan Telecom Co | Korea Information vs. Polaris Office Corp |
| Dongkuk Structures vs. Lotte Data Communication | Dongkuk Structures vs. CG Hi Tech | Dongkuk Structures vs. Iljin Display | Dongkuk Structures vs. Korea Information Communications |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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