Correlation Between ICD and KBSTAR 200TR
Can any of the company-specific risk be diversified away by investing in both ICD and KBSTAR 200TR 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 ICD and KBSTAR 200TR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and KBSTAR 200TR, you can compare the effects of market volatilities on ICD and KBSTAR 200TR 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 ICD with a short position of KBSTAR 200TR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD and KBSTAR 200TR.
Diversification Opportunities for ICD and KBSTAR 200TR
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICD and KBSTAR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and KBSTAR 200TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBSTAR 200TR and ICD 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 ICD Co are associated (or correlated) with KBSTAR 200TR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBSTAR 200TR has no effect on the direction of ICD i.e., ICD and KBSTAR 200TR go up and down completely randomly.
Pair Corralation between ICD and KBSTAR 200TR
Assuming the 90 days trading horizon ICD Co is expected to under-perform the KBSTAR 200TR. In addition to that, ICD is 2.34 times more volatile than KBSTAR 200TR. It trades about -0.08 of its total potential returns per unit of risk. KBSTAR 200TR is currently generating about 0.01 per unit of volatility. If you would invest 1,846,500 in KBSTAR 200TR on August 27, 2024 and sell it today you would lose (8,000) from holding KBSTAR 200TR or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICD Co vs. KBSTAR 200TR
Performance |
| Timeline |
| ICD Co |
| KBSTAR 200TR |
ICD and KBSTAR 200TR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD and KBSTAR 200TR
The main advantage of trading using opposite ICD and KBSTAR 200TR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD position performs unexpectedly, KBSTAR 200TR 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 KBSTAR 200TR will offset losses from the drop in KBSTAR 200TR's long position.| ICD vs. Samsung Electronics Co | ICD vs. Samsung Electronics Co | ICD vs. LG Energy Solution | ICD vs. SK Hynix |
| KBSTAR 200TR vs. Busan Industrial Co | KBSTAR 200TR vs. Busan Ind | KBSTAR 200TR vs. Mirae Asset Daewoo | KBSTAR 200TR vs. Shinhan WTI Futures |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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