Correlation Between Insung Information and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Insung Information and Koryo Credit 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 Insung Information and Koryo Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Koryo Credit Information, you can compare the effects of market volatilities on Insung Information and Koryo Credit 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 Insung Information with a short position of Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Koryo Credit.
Diversification Opportunities for Insung Information and Koryo Credit
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insung and Koryo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information and Insung 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 Insung Information Co are associated (or correlated) with Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Insung Information i.e., Insung Information and Koryo Credit go up and down completely randomly.
Pair Corralation between Insung Information and Koryo Credit
Assuming the 90 days trading horizon Insung Information Co is expected to under-perform the Koryo Credit. In addition to that, Insung Information is 2.75 times more volatile than Koryo Credit Information. It trades about -0.23 of its total potential returns per unit of risk. Koryo Credit Information is currently generating about -0.02 per unit of volatility. If you would invest 1,046,000 in Koryo Credit Information on September 2, 2024 and sell it today you would lose (15,000) from holding Koryo Credit Information or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. Koryo Credit Information
Performance |
| Timeline |
| Insung Information |
| Koryo Credit Information |
Insung Information and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Koryo Credit
The main advantage of trading using opposite Insung Information and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Insung Information vs. Dongsin Engineering Construction | Insung Information vs. Doosan Fuel Cell | Insung Information vs. Daishin Balance 1 | Insung Information vs. Total Soft Bank |
| Koryo Credit vs. Lotte Energy Materials | Koryo Credit vs. Lotte Data Communication | Koryo Credit vs. Nable Communications | Koryo Credit vs. Hana Materials |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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