Correlation Between Korea Information and Insung Information
Can any of the company-specific risk be diversified away by investing in both Korea Information and Insung 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 Korea Information and Insung Information 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 Insung Information Co, you can compare the effects of market volatilities on Korea Information and Insung 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 Korea Information with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Insung Information.
Diversification Opportunities for Korea Information and Insung Information
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Insung is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information 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 Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of Korea Information i.e., Korea Information and Insung Information go up and down completely randomly.
Pair Corralation between Korea Information and Insung Information
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 0.89 times more return on investment than Insung Information. However, Korea Information Engineering is 1.13 times less risky than Insung Information. It trades about -0.01 of its potential returns per unit of risk. Insung Information Co is currently generating about -0.06 per unit of risk. If you would invest 269,500 in Korea Information Engineering on November 6, 2024 and sell it today you would lose (9,500) from holding Korea Information Engineering or give up 3.53% 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. Insung Information Co
Performance |
| Timeline |
| Korea Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Insung Information |
Korea Information and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Insung Information
The main advantage of trading using opposite Korea Information and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Insung 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 Insung Information will offset losses from the drop in Insung Information'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 |
| Insung Information vs. Heungkuk Metaltech CoLtd | Insung Information vs. KCC Engineering Construction | Insung Information vs. Hanshin Construction Co | Insung Information vs. Daiyang Metal Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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