Correlation Between Korea Information and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Korea Information and Koryo Credit 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 Koryo Credit 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 Koryo Credit Information, you can compare the effects of market volatilities on Korea Information and Koryo Credit 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 Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Koryo Credit.
Diversification Opportunities for Korea Information and Koryo Credit
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and Koryo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit 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 Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Korea Information i.e., Korea Information and Koryo Credit go up and down completely randomly.
Pair Corralation between Korea Information and Koryo Credit
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the Koryo Credit. In addition to that, Korea Information is 1.28 times more volatile than Koryo Credit Information. It trades about -0.36 of its total potential returns per unit of risk. Koryo Credit Information is currently generating about -0.01 per unit of volatility. If you would invest 996,000 in Koryo Credit Information on August 25, 2024 and sell it today you would lose (3,000) from holding Koryo Credit Information or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Koryo Credit Information
Performance |
| Timeline |
| Korea Information |
| Koryo Credit Information |
Korea Information and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Koryo Credit
The main advantage of trading using opposite Korea Information and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Korea Information vs. Hannong Chemicals | Korea Information vs. Daejung Chemicals Metals | Korea Information vs. Digital Power Communications | Korea Information vs. Nice Information Telecommunication |
| Koryo Credit vs. Samsung Electronics Co | Koryo Credit vs. Samsung Electronics Co | Koryo Credit vs. Hyundai Motor Co | Koryo Credit vs. Hyundai Motor |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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