Correlation Between Korea Real and Silla Sg
Can any of the company-specific risk be diversified away by investing in both Korea Real and Silla Sg 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 Silla Sg 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 Silla Sg Co, you can compare the effects of market volatilities on Korea Real and Silla Sg 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 Silla Sg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Silla Sg.
Diversification Opportunities for Korea Real and Silla Sg
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Silla is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Silla Sg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silla Sg 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 Silla Sg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silla Sg has no effect on the direction of Korea Real i.e., Korea Real and Silla Sg go up and down completely randomly.
Pair Corralation between Korea Real and Silla Sg
Assuming the 90 days trading horizon Korea Real Estate is expected to generate 0.4 times more return on investment than Silla Sg. However, Korea Real Estate is 2.5 times less risky than Silla Sg. It trades about -0.04 of its potential returns per unit of risk. Silla Sg Co is currently generating about -0.05 per unit of risk. If you would invest 123,189 in Korea Real Estate on September 3, 2024 and sell it today you would lose (20,789) from holding Korea Real Estate or give up 16.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Silla Sg Co
Performance |
| Timeline |
| Korea Real Estate |
| Silla Sg |
Korea Real and Silla Sg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Silla Sg
The main advantage of trading using opposite Korea Real and Silla Sg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Silla Sg 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 Silla Sg will offset losses from the drop in Silla Sg's long position.| Korea Real vs. Sejong Telecom | Korea Real vs. Mobileleader CoLtd | Korea Real vs. Lotte Data Communication | Korea Real vs. Wireless Power Amplifier |
| Silla Sg vs. Jeong Moon Information | Silla Sg vs. TS Investment Corp | Silla Sg vs. Coloray International Investment | Silla Sg vs. Daishin 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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