Correlation Between Korea Information and CU Medical
Can any of the company-specific risk be diversified away by investing in both Korea Information and CU Medical 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 CU Medical 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 CU Medical Systems, you can compare the effects of market volatilities on Korea Information and CU Medical 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 CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and CU Medical.
Diversification Opportunities for Korea Information and CU Medical
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and 115480 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and CU Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Medical Systems 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 CU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Medical Systems has no effect on the direction of Korea Information i.e., Korea Information and CU Medical go up and down completely randomly.
Pair Corralation between Korea Information and CU Medical
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the CU Medical. In addition to that, Korea Information is 1.69 times more volatile than CU Medical Systems. It trades about -0.03 of its total potential returns per unit of risk. CU Medical Systems is currently generating about -0.03 per unit of volatility. If you would invest 81,500 in CU Medical Systems on October 14, 2024 and sell it today you would lose (11,600) from holding CU Medical Systems or give up 14.23% 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. CU Medical Systems
Performance |
| Timeline |
| Korea Information |
| CU Medical Systems |
Korea Information and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and CU Medical
The main advantage of trading using opposite Korea Information and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, CU Medical 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 CU Medical will offset losses from the drop in CU Medical's long position.| Korea Information vs. Ssangyong Information Communication | Korea Information vs. Daishin Information Communications | Korea Information vs. Display Tech Co | Korea Information vs. NICE Information Service |
| CU Medical vs. PJ Metal Co | CU Medical vs. MetaLabs Co | CU Medical vs. Cube Entertainment | CU Medical vs. Formetal 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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