Correlation Between Korea Ratings and LEENO Industrial
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and LEENO Industrial 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 LEENO Industrial 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 LEENO Industrial, you can compare the effects of market volatilities on Korea Ratings and LEENO Industrial 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 LEENO Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and LEENO Industrial.
Diversification Opportunities for Korea Ratings and LEENO Industrial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and LEENO is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and LEENO Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEENO Industrial 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 LEENO Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEENO Industrial has no effect on the direction of Korea Ratings i.e., Korea Ratings and LEENO Industrial go up and down completely randomly.
Pair Corralation between Korea Ratings and LEENO Industrial
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.23 times more return on investment than LEENO Industrial. However, Korea Ratings Co is 4.4 times less risky than LEENO Industrial. It trades about 0.28 of its potential returns per unit of risk. LEENO Industrial is currently generating about -0.2 per unit of risk. If you would invest 8,490,000 in Korea Ratings Co on August 30, 2024 and sell it today you would earn a total of 360,000 from holding Korea Ratings Co or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Ratings Co vs. LEENO Industrial
Performance |
| Timeline |
| Korea Ratings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| LEENO Industrial |
Korea Ratings and LEENO Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and LEENO Industrial
The main advantage of trading using opposite Korea Ratings and LEENO Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, LEENO Industrial 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 LEENO Industrial will offset losses from the drop in LEENO Industrial's long position.| Korea Ratings vs. Settlebank | Korea Ratings vs. SK Chemicals Co | Korea Ratings vs. DB Insurance Co | Korea Ratings vs. Korea Alcohol Industrial |
| LEENO Industrial vs. Tokai Carbon Korea | LEENO Industrial vs. LF Co | LEENO Industrial vs. Koh Young Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |