Correlation Between Korea Information and Kortek
Can any of the company-specific risk be diversified away by investing in both Korea Information and Kortek 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 Kortek 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 Kortek, you can compare the effects of market volatilities on Korea Information and Kortek 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 Kortek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Kortek.
Diversification Opportunities for Korea Information and Kortek
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Kortek is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Kortek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kortek 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 Kortek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kortek has no effect on the direction of Korea Information i.e., Korea Information and Kortek go up and down completely randomly.
Pair Corralation between Korea Information and Kortek
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the Kortek. In addition to that, Korea Information is 1.71 times more volatile than Kortek. It trades about -0.02 of its total potential returns per unit of risk. Kortek is currently generating about -0.01 per unit of volatility. If you would invest 911,485 in Kortek on August 26, 2024 and sell it today you would lose (143,485) from holding Kortek or give up 15.74% 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. Kortek
Performance |
| Timeline |
| Korea Information |
| Kortek |
Korea Information and Kortek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Kortek
The main advantage of trading using opposite Korea Information and Kortek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Kortek 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 Kortek will offset losses from the drop in Kortek's long position.| Korea Information vs. Korea Real Estate | Korea Information vs. Korea Ratings Co | Korea Information vs. IQuest Co | Korea Information vs. Wonbang Tech Co |
| Kortek vs. Korea Computer Terminal | Kortek vs. Atec Co | Kortek vs. Suprema ID | Kortek vs. Korea Information Engineering |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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