Correlation Between Korea Ratings and Nepes
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and Nepes 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 Nepes 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 Nepes, you can compare the effects of market volatilities on Korea Ratings and Nepes 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 Nepes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Nepes.
Diversification Opportunities for Korea Ratings and Nepes
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Nepes is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and Nepes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nepes 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 Nepes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nepes has no effect on the direction of Korea Ratings i.e., Korea Ratings and Nepes go up and down completely randomly.
Pair Corralation between Korea Ratings and Nepes
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.21 times more return on investment than Nepes. However, Korea Ratings Co is 4.76 times less risky than Nepes. It trades about 0.11 of its potential returns per unit of risk. Nepes is currently generating about -0.04 per unit of risk. If you would invest 6,241,607 in Korea Ratings Co on August 31, 2024 and sell it today you would earn a total of 2,568,393 from holding Korea Ratings Co or generate 41.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Ratings Co vs. Nepes
Performance |
| Timeline |
| Korea Ratings |
| Nepes |
Korea Ratings and Nepes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and Nepes
The main advantage of trading using opposite Korea Ratings and Nepes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, Nepes 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 Nepes will offset losses from the drop in Nepes' long position.| Korea Ratings vs. Anam Electronics Co | Korea Ratings vs. KyungIn Electronics Co | Korea Ratings vs. Hyundai Engineering Plastics | Korea Ratings vs. Iljin Materials Co |
| Nepes vs. Dongjin Semichem Co | Nepes vs. SFA Semicon Co | Nepes vs. Seoul Semiconductor Co | Nepes vs. EO Technics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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