Correlation Between Korea Ratings and Next Bt
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and Next Bt 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 Next Bt 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 Next Bt Co, you can compare the effects of market volatilities on Korea Ratings and Next Bt 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 Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Next Bt.
Diversification Opportunities for Korea Ratings and Next Bt
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Next is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt 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 Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of Korea Ratings i.e., Korea Ratings and Next Bt go up and down completely randomly.
Pair Corralation between Korea Ratings and Next Bt
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.17 times more return on investment than Next Bt. However, Korea Ratings Co is 5.91 times less risky than Next Bt. It trades about 0.12 of its potential returns per unit of risk. Next Bt Co is currently generating about -0.07 per unit of risk. If you would invest 7,227,796 in Korea Ratings Co on September 2, 2024 and sell it today you would earn a total of 1,572,204 from holding Korea Ratings Co or generate 21.75% 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. Next Bt Co
Performance |
| Timeline |
| Korea Ratings |
| Next Bt |
Korea Ratings and Next Bt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and Next Bt
The main advantage of trading using opposite Korea Ratings and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt's long position.| Korea Ratings vs. CKH Food Health | Korea Ratings vs. Display Tech Co | Korea Ratings vs. Digital Power Communications | Korea Ratings vs. CG Hi Tech |
| Next Bt vs. Alton Sports CoLtd | Next Bt vs. Iljin Display | Next Bt vs. Choil Aluminum | Next Bt vs. QUALITAS SEMICONDUCTOR LTD |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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