Correlation Between Korea Information and CU Medical
Can any of the company-specific risk be diversified away by investing in both Korea Information and CU Medical 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 CU Medical 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 CU Medical Systems, you can compare the effects of market volatilities on Korea Information and CU Medical 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 CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and CU Medical.
Diversification Opportunities for Korea Information and CU Medical
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Korea and 115480 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and CU Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Medical Systems 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 CU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Medical Systems has no effect on the direction of Korea Information i.e., Korea Information and CU Medical go up and down completely randomly.
Pair Corralation between Korea Information and CU Medical
Assuming the 90 days trading horizon Korea Information Communications is expected to generate 0.84 times more return on investment than CU Medical. However, Korea Information Communications is 1.19 times less risky than CU Medical. It trades about 0.1 of its potential returns per unit of risk. CU Medical Systems is currently generating about 0.07 per unit of risk. If you would invest 786,000 in Korea Information Communications on October 25, 2024 and sell it today you would earn a total of 13,000 from holding Korea Information Communications or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. CU Medical Systems
Performance |
| Timeline |
| Korea Information |
| CU Medical Systems |
Korea Information and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and CU Medical
The main advantage of trading using opposite Korea Information and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, CU Medical 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 CU Medical will offset losses from the drop in CU Medical's long position.| Korea Information vs. Samsung Electronics Co | Korea Information vs. Samsung Electronics Co | Korea Information vs. SK Hynix | Korea Information vs. HMM Co |
| CU Medical vs. Korea Information Communications | CU Medical vs. PJ Metal Co | CU Medical vs. Nable Communications | CU Medical vs. Digital Power 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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