Correlation Between Osang Healthcare and Korea Information
Can any of the company-specific risk be diversified away by investing in both Osang Healthcare 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 Osang Healthcare and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osang Healthcare Co,Ltd and Korea Information Engineering, you can compare the effects of market volatilities on Osang Healthcare 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 Osang Healthcare with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osang Healthcare and Korea Information.
Diversification Opportunities for Osang Healthcare and Korea Information
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Osang and Korea is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and Osang Healthcare 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 Osang Healthcare Co,Ltd 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 Osang Healthcare i.e., Osang Healthcare and Korea Information go up and down completely randomly.
Pair Corralation between Osang Healthcare and Korea Information
Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to under-perform the Korea Information. In addition to that, Osang Healthcare is 1.41 times more volatile than Korea Information Engineering. It trades about -0.07 of its total potential returns per unit of risk. Korea Information Engineering is currently generating about -0.02 per unit of volatility. If you would invest 420,000 in Korea Information Engineering on October 14, 2024 and sell it today you would lose (165,000) from holding Korea Information Engineering or give up 39.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 42.32% |
| Values | Daily Returns |
Osang Healthcare Co,Ltd vs. Korea Information Engineering
Performance |
| Timeline |
| Osang Healthcare Co,Ltd |
| Korea Information |
Osang Healthcare and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osang Healthcare and Korea Information
The main advantage of trading using opposite Osang Healthcare and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osang Healthcare 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.| Osang Healthcare vs. GS Retail Co | Osang Healthcare vs. LG Household Healthcare | Osang Healthcare vs. Daishin Information Communications | Osang Healthcare vs. CKH Food Health |
| Korea Information vs. LG Household Healthcare | Korea Information vs. J Steel Co | Korea Information vs. Osang Healthcare Co,Ltd | Korea Information vs. Hankuk Steel Wire |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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