Correlation Between Korea Information and SCI Information
Can any of the company-specific risk be diversified away by investing in both Korea Information and SCI 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 SCI 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 SCI Information Service, you can compare the effects of market volatilities on Korea Information and SCI 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and SCI Information.
Diversification Opportunities for Korea Information and SCI Information
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and SCI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Korea Information i.e., Korea Information and SCI Information go up and down completely randomly.
Pair Corralation between Korea Information and SCI Information
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 1.22 times more return on investment than SCI Information. However, Korea Information is 1.22 times more volatile than SCI Information Service. It trades about -0.01 of its potential returns per unit of risk. SCI Information Service is currently generating about -0.02 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. SCI Information Service
Performance |
| Timeline |
| Korea Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SCI Information Service |
Korea Information and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and SCI Information
The main advantage of trading using opposite Korea Information and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, SCI 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 SCI Information will offset losses from the drop in SCI 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 |
| SCI Information vs. Hankukpackage Co | SCI Information vs. Daesung Hi Tech Co | SCI Information vs. Innowireless Co | SCI Information vs. LG Household Healthcare |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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