Correlation Between Korea Real and Zinus
Can any of the company-specific risk be diversified away by investing in both Korea Real and Zinus 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 Real and Zinus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Zinus Inc, you can compare the effects of market volatilities on Korea Real and Zinus 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 Real with a short position of Zinus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Zinus.
Diversification Opportunities for Korea Real and Zinus
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Zinus is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Zinus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinus Inc and Korea Real 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 Real Estate are associated (or correlated) with Zinus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinus Inc has no effect on the direction of Korea Real i.e., Korea Real and Zinus go up and down completely randomly.
Pair Corralation between Korea Real and Zinus
Assuming the 90 days trading horizon Korea Real Estate is expected to under-perform the Zinus. But the stock apears to be less risky and, when comparing its historical volatility, Korea Real Estate is 4.91 times less risky than Zinus. The stock trades about -0.09 of its potential returns per unit of risk. The Zinus Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,947,000 in Zinus Inc on October 26, 2024 and sell it today you would earn a total of 173,000 from holding Zinus Inc or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Korea Real Estate vs. Zinus Inc
Performance |
| Timeline |
| Korea Real Estate |
| Zinus Inc |
Korea Real and Zinus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Zinus
The main advantage of trading using opposite Korea Real and Zinus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Zinus 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 Zinus will offset losses from the drop in Zinus' long position.| Korea Real vs. Alton Sports CoLtd | Korea Real vs. BGF Retail Co | Korea Real vs. INFINITT Healthcare Co | Korea Real vs. Chorokbaem Healthcare Co |
| Zinus vs. Grand Korea Leisure | Zinus vs. Alton Sports CoLtd | Zinus vs. Samyung Trading Co | Zinus vs. PlayD Co |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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