Correlation Between Korea Information and Pureun Mutual
Can any of the company-specific risk be diversified away by investing in both Korea Information and Pureun Mutual 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 Information and Pureun Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Engineering and Pureun Mutual Savings, you can compare the effects of market volatilities on Korea Information and Pureun Mutual 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 Information with a short position of Pureun Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Pureun Mutual.
Diversification Opportunities for Korea Information and Pureun Mutual
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and Pureun is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Pureun Mutual Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pureun Mutual Savings and Korea Information 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 Information Engineering are associated (or correlated) with Pureun Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pureun Mutual Savings has no effect on the direction of Korea Information i.e., Korea Information and Pureun Mutual go up and down completely randomly.
Pair Corralation between Korea Information and Pureun Mutual
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 4.13 times more return on investment than Pureun Mutual. However, Korea Information is 4.13 times more volatile than Pureun Mutual Savings. It trades about 0.2 of its potential returns per unit of risk. Pureun Mutual Savings is currently generating about -0.34 per unit of risk. If you would invest 250,000 in Korea Information Engineering on November 9, 2024 and sell it today you would earn a total of 16,000 from holding Korea Information Engineering or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Pureun Mutual Savings
Performance |
| Timeline |
| Korea Information |
| Pureun Mutual Savings |
Korea Information and Pureun Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Pureun Mutual
The main advantage of trading using opposite Korea Information and Pureun Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Pureun Mutual 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 Pureun Mutual will offset losses from the drop in Pureun Mutual's long position.| Korea Information vs. Miwon Chemicals Co | Korea Information vs. Sung Bo Chemicals | Korea Information vs. Pan Entertainment Co | Korea Information vs. TJ media Co |
| Pureun Mutual vs. Korea Computer | Pureun Mutual vs. KPX Green Chemical | Pureun Mutual vs. Ssangyong Information Communication | Pureun Mutual vs. Nice Information Telecommunication |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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