Correlation Between Kakao Corp and Anam Electronics
Can any of the company-specific risk be diversified away by investing in both Kakao Corp and Anam Electronics 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 Kakao Corp and Anam Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kakao Corp and Anam Electronics Co, you can compare the effects of market volatilities on Kakao Corp and Anam Electronics 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 Kakao Corp with a short position of Anam Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Corp and Anam Electronics.
Diversification Opportunities for Kakao Corp and Anam Electronics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kakao and Anam is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Corp and Anam Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anam Electronics and Kakao Corp 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 Kakao Corp are associated (or correlated) with Anam Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anam Electronics has no effect on the direction of Kakao Corp i.e., Kakao Corp and Anam Electronics go up and down completely randomly.
Pair Corralation between Kakao Corp and Anam Electronics
Assuming the 90 days trading horizon Kakao Corp is expected to generate 0.95 times more return on investment than Anam Electronics. However, Kakao Corp is 1.05 times less risky than Anam Electronics. It trades about -0.01 of its potential returns per unit of risk. Anam Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 5,498,012 in Kakao Corp on September 12, 2024 and sell it today you would lose (1,113,012) from holding Kakao Corp or give up 20.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kakao Corp vs. Anam Electronics Co
Performance |
| Timeline |
| Kakao Corp |
| Anam Electronics |
Kakao Corp and Anam Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Corp and Anam Electronics
The main advantage of trading using opposite Kakao Corp and Anam Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Corp position performs unexpectedly, Anam Electronics 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 Anam Electronics will offset losses from the drop in Anam Electronics' long position.| Kakao Corp vs. Netmarble Games Corp | Kakao Corp vs. Mgame Corp | Kakao Corp vs. Genie Music | Kakao Corp vs. Iljin Display |
| Anam Electronics vs. Samsung Electronics Co | Anam Electronics vs. Samsung Electronics Co | Anam Electronics vs. SK Hynix | Anam Electronics vs. POSCO Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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