Correlation Between Korea Real and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both Korea Real and Guyoung Technology 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 Guyoung Technology 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 Guyoung Technology Co, you can compare the effects of market volatilities on Korea Real and Guyoung Technology 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 Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Guyoung Technology.
Diversification Opportunities for Korea Real and Guyoung Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Guyoung is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung Technology 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 Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of Korea Real i.e., Korea Real and Guyoung Technology go up and down completely randomly.
Pair Corralation between Korea Real and Guyoung Technology
Assuming the 90 days trading horizon Korea Real Estate is expected to under-perform the Guyoung Technology. But the stock apears to be less risky and, when comparing its historical volatility, Korea Real Estate is 2.7 times less risky than Guyoung Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Guyoung Technology Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 227,604 in Guyoung Technology Co on September 24, 2024 and sell it today you would lose (28,504) from holding Guyoung Technology Co or give up 12.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Korea Real Estate vs. Guyoung Technology Co
Performance |
| Timeline |
| Korea Real Estate |
| Guyoung Technology |
Korea Real and Guyoung Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Guyoung Technology
The main advantage of trading using opposite Korea Real and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Guyoung Technology 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 Guyoung Technology will offset losses from the drop in Guyoung Technology's long position.| Korea Real vs. Samsung Electronics Co | Korea Real vs. Samsung Electronics Co | Korea Real vs. LG Energy Solution | Korea Real vs. SK Hynix |
| Guyoung Technology vs. Woori Technology Investment | Guyoung Technology vs. Samsung Card Co | Guyoung Technology vs. Korea Real Estate | Guyoung Technology vs. CHOROKBAEM PANY 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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