Correlation Between Korea Ratings and Korea Real
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and Korea Real 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 Korea Real 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 Korea Real Estate, you can compare the effects of market volatilities on Korea Ratings and Korea Real 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 Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Korea Real.
Diversification Opportunities for Korea Ratings and Korea Real
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Korea is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Korea Ratings i.e., Korea Ratings and Korea Real go up and down completely randomly.
Pair Corralation between Korea Ratings and Korea Real
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.69 times more return on investment than Korea Real. However, Korea Ratings Co is 1.45 times less risky than Korea Real. It trades about 0.1 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.04 per unit of risk. If you would invest 6,212,498 in Korea Ratings Co on August 24, 2024 and sell it today you would earn a total of 2,497,502 from holding Korea Ratings Co or generate 40.2% 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. Korea Real Estate
Performance |
| Timeline |
| Korea Ratings |
| Korea Real Estate |
Korea Ratings and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and Korea Real
The main advantage of trading using opposite Korea Ratings and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Korea Ratings vs. Hyundai Home Shopping | Korea Ratings vs. Samlip General Foods | Korea Ratings vs. Polaris Office Corp | Korea Ratings vs. Organic Special Pet |
| Korea Real vs. Samsung Electronics Co | Korea Real vs. Samsung Electronics Co | Korea Real vs. LG Energy Solution | Korea Real vs. SK Hynix |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |