Correlation Between Korea Information and Settlebank
Can any of the company-specific risk be diversified away by investing in both Korea Information and Settlebank 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 Settlebank 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 Settlebank, you can compare the effects of market volatilities on Korea Information and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Settlebank.
Diversification Opportunities for Korea Information and Settlebank
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Settlebank is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Korea Information i.e., Korea Information and Settlebank go up and down completely randomly.
Pair Corralation between Korea Information and Settlebank
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the Settlebank. In addition to that, Korea Information is 1.23 times more volatile than Settlebank. It trades about -0.16 of its total potential returns per unit of risk. Settlebank is currently generating about 0.01 per unit of volatility. If you would invest 1,419,000 in Settlebank on October 13, 2024 and sell it today you would earn a total of 2,000 from holding Settlebank or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. Settlebank
Performance |
| Timeline |
| Korea Information |
| Settlebank |
Korea Information and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Settlebank
The main advantage of trading using opposite Korea Information and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Korea Information vs. Daiyang Metal Co | Korea Information vs. Global Standard Technology | Korea Information vs. Eugene Technology CoLtd | Korea Information vs. iNtRON Biotechnology |
| Settlebank vs. Hwasung Industrial Co | Settlebank vs. Seoyon Topmetal Co | Settlebank vs. Hyunwoo Industrial Co | Settlebank vs. Dongil Metal 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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