Correlation Between Korea Real and Haesung DS
Can any of the company-specific risk be diversified away by investing in both Korea Real and Haesung DS 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 Haesung DS 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 Haesung DS Co, you can compare the effects of market volatilities on Korea Real and Haesung DS 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 Haesung DS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Haesung DS.
Diversification Opportunities for Korea Real and Haesung DS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Haesung is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Haesung DS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung DS 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 Haesung DS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung DS has no effect on the direction of Korea Real i.e., Korea Real and Haesung DS go up and down completely randomly.
Pair Corralation between Korea Real and Haesung DS
Assuming the 90 days trading horizon Korea Real Estate is expected to generate 0.16 times more return on investment than Haesung DS. However, Korea Real Estate is 6.35 times less risky than Haesung DS. It trades about -0.06 of its potential returns per unit of risk. Haesung DS Co is currently generating about -0.14 per unit of risk. If you would invest 104,000 in Korea Real Estate on August 29, 2024 and sell it today you would lose (900.00) from holding Korea Real Estate or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Haesung DS Co
Performance |
| Timeline |
| Korea Real Estate |
| Haesung DS |
Korea Real and Haesung DS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Haesung DS
The main advantage of trading using opposite Korea Real and Haesung DS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Haesung DS 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 Haesung DS will offset losses from the drop in Haesung DS's long position.| Korea Real vs. SCI Information Service | Korea Real vs. Shin Steel Co | Korea Real vs. Daishin Information Communications | Korea Real vs. Hankook Steel Co |
| Haesung DS vs. SEOJEON ELECTRIC MACHINERY | Haesung DS vs. Daewoo Engineering Construction | Haesung DS vs. GS Engineering Construction | Haesung DS vs. HJ ShipBuilding Construction |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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