Correlation Between Korea Real and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Real and Vissem Electronics 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 Vissem Electronics 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 Vissem Electronics Co, you can compare the effects of market volatilities on Korea Real and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Vissem Electronics.
Diversification Opportunities for Korea Real and Vissem Electronics
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Vissem is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of Korea Real i.e., Korea Real and Vissem Electronics go up and down completely randomly.
Pair Corralation between Korea Real and Vissem Electronics
Assuming the 90 days trading horizon Korea Real Estate is expected to under-perform the Vissem Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Korea Real Estate is 1.17 times less risky than Vissem Electronics. The stock trades about -0.22 of its potential returns per unit of risk. The Vissem Electronics Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 352,500 in Vissem Electronics Co on October 23, 2024 and sell it today you would earn a total of 15,500 from holding Vissem Electronics Co or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Vissem Electronics Co
Performance |
| Timeline |
| Korea Real Estate |
| Vissem Electronics |
Korea Real and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Vissem Electronics
The main advantage of trading using opposite Korea Real and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| Korea Real vs. Cheryong Industrial CoLtd | Korea Real vs. Kbi Metal Co | Korea Real vs. Cuckoo Homesys Co | Korea Real vs. Hannong Chemicals |
| Vissem Electronics vs. Cuckoo Homesys Co | Vissem Electronics vs. E Investment Development | Vissem Electronics vs. KTB Investment Securities | Vissem Electronics vs. SV Investment |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |