Correlation Between Korea Information and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Korea Information and Kyeryong Construction 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 Kyeryong Construction 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 Kyeryong Construction Industrial, you can compare the effects of market volatilities on Korea Information and Kyeryong Construction 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 Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Kyeryong Construction.
Diversification Opportunities for Korea Information and Kyeryong Construction
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Kyeryong is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction 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 Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Korea Information i.e., Korea Information and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Korea Information and Kyeryong Construction
Assuming the 90 days trading horizon Korea Information Engineering is not expected to generate positive returns. Moreover, Korea Information is 1.51 times more volatile than Kyeryong Construction Industrial. It trades away all of its potential returns to assume current level of volatility. Kyeryong Construction Industrial is currently generating about -0.13 per unit of risk. If you would invest 268,000 in Korea Information Engineering on November 7, 2024 and sell it today you would lose (6,000) from holding Korea Information Engineering or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Korea Information |
| Kyeryong Construction |
Korea Information and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Kyeryong Construction
The main advantage of trading using opposite Korea Information and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| Korea Information vs. Iljin Display | Korea Information vs. KPX Green Chemical | Korea Information vs. Korea Petro Chemical | Korea Information vs. Miwon Chemical |
| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Daewoo SBI SPAC | Kyeryong Construction vs. Dream Security co | Kyeryong Construction vs. Microfriend |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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