Correlation Between MEDIANA CoLtd and Korea Electric
Can any of the company-specific risk be diversified away by investing in both MEDIANA CoLtd and Korea Electric 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 MEDIANA CoLtd and Korea Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIANA CoLtd and Korea Electric Power, you can compare the effects of market volatilities on MEDIANA CoLtd and Korea Electric 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 MEDIANA CoLtd with a short position of Korea Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIANA CoLtd and Korea Electric.
Diversification Opportunities for MEDIANA CoLtd and Korea Electric
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MEDIANA and Korea is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MEDIANA CoLtd and Korea Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electric Power and MEDIANA CoLtd 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 MEDIANA CoLtd are associated (or correlated) with Korea Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electric Power has no effect on the direction of MEDIANA CoLtd i.e., MEDIANA CoLtd and Korea Electric go up and down completely randomly.
Pair Corralation between MEDIANA CoLtd and Korea Electric
Assuming the 90 days trading horizon MEDIANA CoLtd is expected to generate 1.17 times more return on investment than Korea Electric. However, MEDIANA CoLtd is 1.17 times more volatile than Korea Electric Power. It trades about 0.31 of its potential returns per unit of risk. Korea Electric Power is currently generating about 0.22 per unit of risk. If you would invest 466,000 in MEDIANA CoLtd on November 27, 2024 and sell it today you would earn a total of 36,000 from holding MEDIANA CoLtd or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDIANA CoLtd vs. Korea Electric Power
Performance |
| Timeline |
| MEDIANA CoLtd |
| Korea Electric Power |
MEDIANA CoLtd and Korea Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIANA CoLtd and Korea Electric
The main advantage of trading using opposite MEDIANA CoLtd and Korea Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIANA CoLtd position performs unexpectedly, Korea Electric 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 Korea Electric will offset losses from the drop in Korea Electric's long position.| MEDIANA CoLtd vs. Innowireless Co | MEDIANA CoLtd vs. Sejong Industrial | MEDIANA CoLtd vs. Duksan Hi Metal | MEDIANA CoLtd vs. Mobile Appliance |
| Korea Electric vs. Lotte Non Life Insurance | Korea Electric vs. Seoyon Topmetal Co | Korea Electric vs. Samick Musical Instruments | Korea Electric vs. DB Insurance 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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