Correlation Between Korea Real and Intops
Can any of the company-specific risk be diversified away by investing in both Korea Real and Intops 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 Intops 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 Intops Co, you can compare the effects of market volatilities on Korea Real and Intops 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 Intops. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Intops.
Diversification Opportunities for Korea Real and Intops
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Intops is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Intops Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intops 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 Intops. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intops has no effect on the direction of Korea Real i.e., Korea Real and Intops go up and down completely randomly.
Pair Corralation between Korea Real and Intops
Assuming the 90 days trading horizon Korea Real Estate is expected to under-perform the Intops. But the stock apears to be less risky and, when comparing its historical volatility, Korea Real Estate is 11.52 times less risky than Intops. The stock trades about -0.01 of its potential returns per unit of risk. The Intops Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,664,000 in Intops Co on November 30, 2024 and sell it today you would earn a total of 152,000 from holding Intops Co or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Intops Co
Performance |
| Timeline |
| Korea Real Estate |
| Intops |
Korea Real and Intops Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Intops
The main advantage of trading using opposite Korea Real and Intops positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Intops 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 Intops will offset losses from the drop in Intops' long position.| Korea Real vs. KMH Hitech Co | Korea Real vs. Coloray International Investment | Korea Real vs. THiRA UTECH LTD | Korea Real vs. MNtech Co |
| Intops vs. Samsung Electronics Co | Intops vs. Samsung Electronics Co | Intops vs. SK Hynix | Intops vs. HMM 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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