Correlation Between Korea Ratings and Korea Information
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and Korea Information 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 Information 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 Information Engineering, you can compare the effects of market volatilities on Korea Ratings and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Korea Information.
Diversification Opportunities for Korea Ratings and Korea Information
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korea and Korea is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Korea Ratings i.e., Korea Ratings and Korea Information go up and down completely randomly.
Pair Corralation between Korea Ratings and Korea Information
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.28 times more return on investment than Korea Information. However, Korea Ratings Co is 3.54 times less risky than Korea Information. It trades about 0.07 of its potential returns per unit of risk. Korea Information Engineering is currently generating about -0.03 per unit of risk. If you would invest 6,553,687 in Korea Ratings Co on November 19, 2024 and sell it today you would earn a total of 1,876,313 from holding Korea Ratings Co or generate 28.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Korea Ratings Co vs. Korea Information Engineering
Performance |
| Timeline |
| Korea Ratings |
| Korea Information |
Korea Ratings and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and Korea Information
The main advantage of trading using opposite Korea Ratings and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| Korea Ratings vs. Daesung Hi Tech Co | Korea Ratings vs. Nice Information Telecommunication | Korea Ratings vs. Sempio Foods Co | Korea Ratings vs. Innowireless Co |
| Korea Information vs. Dongil Metal Co | Korea Information vs. PJ Metal Co | Korea Information vs. Golden Bridge Investment | Korea Information vs. Kukil Metal 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |