Correlation Between Korea Real and Okins Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Real and Okins 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 Okins 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 Okins Electronics Co, you can compare the effects of market volatilities on Korea Real and Okins 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 Okins Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Okins Electronics.
Diversification Opportunities for Korea Real and Okins Electronics
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Okins is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Okins Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okins 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 Okins Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okins Electronics has no effect on the direction of Korea Real i.e., Korea Real and Okins Electronics go up and down completely randomly.
Pair Corralation between Korea Real and Okins Electronics
Assuming the 90 days trading horizon Korea Real Estate is expected to generate 0.33 times more return on investment than Okins Electronics. However, Korea Real Estate is 3.0 times less risky than Okins Electronics. It trades about -0.14 of its potential returns per unit of risk. Okins Electronics Co is currently generating about -0.65 per unit of risk. If you would invest 104,000 in Korea Real Estate on August 27, 2024 and sell it today you would lose (1,800) from holding Korea Real Estate or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Okins Electronics Co
Performance |
| Timeline |
| Korea Real Estate |
| Okins Electronics |
Korea Real and Okins Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Okins Electronics
The main advantage of trading using opposite Korea Real and Okins Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Okins 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 Okins Electronics will offset losses from the drop in Okins Electronics' long position.| Korea Real vs. Sam Yang Foods | Korea Real vs. Pyung Hwa Industrial | Korea Real vs. PJ Metal Co | Korea Real vs. Seoul Food Industrial |
| Okins Electronics vs. Korea Real Estate | Okins Electronics vs. Korea Ratings Co | Okins Electronics vs. IQuest Co | Okins Electronics vs. Wonbang Tech 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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