Correlation Between Korea Ratings and FOODWELL
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and FOODWELL 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 Ratings and FOODWELL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Ratings Co and FOODWELL Co, you can compare the effects of market volatilities on Korea Ratings and FOODWELL 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 Ratings with a short position of FOODWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and FOODWELL.
Diversification Opportunities for Korea Ratings and FOODWELL
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korea and FOODWELL is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and FOODWELL Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOODWELL and Korea Ratings 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 Ratings Co are associated (or correlated) with FOODWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOODWELL has no effect on the direction of Korea Ratings i.e., Korea Ratings and FOODWELL go up and down completely randomly.
Pair Corralation between Korea Ratings and FOODWELL
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.4 times more return on investment than FOODWELL. However, Korea Ratings Co is 2.53 times less risky than FOODWELL. It trades about 0.22 of its potential returns per unit of risk. FOODWELL Co is currently generating about -0.18 per unit of risk. If you would invest 8,520,000 in Korea Ratings Co on September 3, 2024 and sell it today you would earn a total of 280,000 from holding Korea Ratings Co or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Ratings Co vs. FOODWELL Co
Performance |
| Timeline |
| Korea Ratings |
| FOODWELL |
Korea Ratings and FOODWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and FOODWELL
The main advantage of trading using opposite Korea Ratings and FOODWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, FOODWELL 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 FOODWELL will offset losses from the drop in FOODWELL's long position.| Korea Ratings vs. Ilji Technology Co | Korea Ratings vs. LG Electronics Pfd | Korea Ratings vs. Korean Air Lines | Korea Ratings vs. KyungIn Electronics Co |
| FOODWELL vs. Nam Hwa Construction | FOODWELL vs. Daewoo Engineering Construction | FOODWELL vs. Sam Yang Foods | FOODWELL vs. Keyang Electric Machinery |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |