Correlation Between Korea Electronic and Design
Can any of the company-specific risk be diversified away by investing in both Korea Electronic and Design 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 Electronic and Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Electronic Certification and Design Co, you can compare the effects of market volatilities on Korea Electronic and Design 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 Electronic with a short position of Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electronic and Design.
Diversification Opportunities for Korea Electronic and Design
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Design is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electronic Certification and Design Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Design and Korea Electronic 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 Electronic Certification are associated (or correlated) with Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Design has no effect on the direction of Korea Electronic i.e., Korea Electronic and Design go up and down completely randomly.
Pair Corralation between Korea Electronic and Design
Assuming the 90 days trading horizon Korea Electronic Certification is expected to under-perform the Design. But the stock apears to be less risky and, when comparing its historical volatility, Korea Electronic Certification is 6.77 times less risky than Design. The stock trades about -0.13 of its potential returns per unit of risk. The Design Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 65,500 in Design Co on September 2, 2024 and sell it today you would earn a total of 33,400 from holding Design Co or generate 50.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electronic Certification vs. Design Co
Performance |
| Timeline |
| Korea Electronic Cer |
| Design |
Korea Electronic and Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electronic and Design
The main advantage of trading using opposite Korea Electronic and Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electronic position performs unexpectedly, Design 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 Design will offset losses from the drop in Design's long position.| Korea Electronic vs. Korea New Network | Korea Electronic vs. ICD Co | Korea Electronic vs. DYPNF CoLtd | Korea Electronic vs. Busan Industrial Co |
| Design vs. Daedong Metals Co | Design vs. PJ Metal Co | Design vs. ITM Semiconductor Co | Design vs. Taeyang Metal Industrial |
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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