Correlation Between Korea Aerospace and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Korea Aerospace and Kukil Metal 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 Aerospace and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Aerospace Industries and Kukil Metal Co, you can compare the effects of market volatilities on Korea Aerospace and Kukil Metal 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 Aerospace with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Aerospace and Kukil Metal.
Diversification Opportunities for Korea Aerospace and Kukil Metal
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Kukil is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Korea Aerospace Industries and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and Korea Aerospace 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 Aerospace Industries are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Korea Aerospace i.e., Korea Aerospace and Kukil Metal go up and down completely randomly.
Pair Corralation between Korea Aerospace and Kukil Metal
Assuming the 90 days trading horizon Korea Aerospace Industries is expected to under-perform the Kukil Metal. In addition to that, Korea Aerospace is 1.33 times more volatile than Kukil Metal Co. It trades about -0.24 of its total potential returns per unit of risk. Kukil Metal Co is currently generating about -0.07 per unit of volatility. If you would invest 180,700 in Kukil Metal Co on September 14, 2024 and sell it today you would lose (7,500) from holding Kukil Metal Co or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Korea Aerospace Industries vs. Kukil Metal Co
Performance |
| Timeline |
| Korea Aerospace Indu |
| Kukil Metal |
Korea Aerospace and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Aerospace and Kukil Metal
The main advantage of trading using opposite Korea Aerospace and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Aerospace position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Korea Aerospace vs. Sam Yang Foods | Korea Aerospace vs. Jb Financial | Korea Aerospace vs. Korean Reinsurance Co | Korea Aerospace vs. Haitai Confectionery Foods |
| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Samhyun Steel Co | Kukil Metal vs. Gyeongnam Steel Co | Kukil Metal vs. Jeil Steel Mfg |
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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