Correlation Between Korea Ratings and Aloys
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and Aloys 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 Aloys 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 Aloys Inc, you can compare the effects of market volatilities on Korea Ratings and Aloys 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 Aloys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Aloys.
Diversification Opportunities for Korea Ratings and Aloys
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Aloys is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and Aloys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aloys Inc 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 Aloys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aloys Inc has no effect on the direction of Korea Ratings i.e., Korea Ratings and Aloys go up and down completely randomly.
Pair Corralation between Korea Ratings and Aloys
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.26 times more return on investment than Aloys. However, Korea Ratings Co is 3.89 times less risky than Aloys. It trades about 0.1 of its potential returns per unit of risk. Aloys Inc is currently generating about -0.05 per unit of risk. If you would invest 6,280,955 in Korea Ratings Co on September 5, 2024 and sell it today you would earn a total of 2,589,045 from holding Korea Ratings Co or generate 41.22% 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. Aloys Inc
Performance |
| Timeline |
| Korea Ratings |
| Aloys Inc |
Korea Ratings and Aloys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and Aloys
The main advantage of trading using opposite Korea Ratings and Aloys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, Aloys 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 Aloys will offset losses from the drop in Aloys' long position.| Korea Ratings vs. Ssangyong Information Communication | Korea Ratings vs. SK Chemicals Co | Korea Ratings vs. Taegu Broadcasting | Korea Ratings vs. Shinhan Inverse Silver |
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 Directory module to find actively traded commodities issued by global exchanges.
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