Correlation Between Korea Information and Haesung Optics
Can any of the company-specific risk be diversified away by investing in both Korea Information and Haesung Optics 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 Haesung Optics 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 Haesung Optics Co, you can compare the effects of market volatilities on Korea Information and Haesung Optics 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 Haesung Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Haesung Optics.
Diversification Opportunities for Korea Information and Haesung Optics
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Haesung is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Haesung Optics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Optics 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 Haesung Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Optics has no effect on the direction of Korea Information i.e., Korea Information and Haesung Optics go up and down completely randomly.
Pair Corralation between Korea Information and Haesung Optics
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 1.0 times more return on investment than Haesung Optics. However, Korea Information Engineering is 1.0 times less risky than Haesung Optics. It trades about -0.35 of its potential returns per unit of risk. Haesung Optics Co is currently generating about -0.49 per unit of risk. If you would invest 265,500 in Korea Information Engineering on September 2, 2024 and sell it today you would lose (29,000) from holding Korea Information Engineering or give up 10.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Haesung Optics Co
Performance |
| Timeline |
| Korea Information |
| Haesung Optics |
Korea Information and Haesung Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Haesung Optics
The main advantage of trading using opposite Korea Information and Haesung Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Haesung Optics 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 Haesung Optics will offset losses from the drop in Haesung Optics' long position.| Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
| Haesung Optics vs. Dongsin Engineering Construction | Haesung Optics vs. Doosan Fuel Cell | Haesung Optics vs. Daishin Balance 1 | Haesung Optics vs. Total Soft Bank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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