Correlation Between Koryo Credit and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Koryo Credit and Eagon Industrial 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 Koryo Credit and Eagon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koryo Credit Information and Eagon Industrial Co, you can compare the effects of market volatilities on Koryo Credit and Eagon Industrial 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 Koryo Credit with a short position of Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Eagon Industrial.
Diversification Opportunities for Koryo Credit and Eagon Industrial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koryo and Eagon is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon Industrial and Koryo Credit 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 Koryo Credit Information are associated (or correlated) with Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Koryo Credit i.e., Koryo Credit and Eagon Industrial go up and down completely randomly.
Pair Corralation between Koryo Credit and Eagon Industrial
Assuming the 90 days trading horizon Koryo Credit Information is expected to generate 0.9 times more return on investment than Eagon Industrial. However, Koryo Credit Information is 1.11 times less risky than Eagon Industrial. It trades about 0.01 of its potential returns per unit of risk. Eagon Industrial Co is currently generating about -0.05 per unit of risk. If you would invest 1,010,436 in Koryo Credit Information on September 4, 2024 and sell it today you would earn a total of 26,564 from holding Koryo Credit Information or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Eagon Industrial Co
Performance |
| Timeline |
| Koryo Credit Information |
| Eagon Industrial |
Koryo Credit and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Eagon Industrial
The main advantage of trading using opposite Koryo Credit and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit position performs unexpectedly, Eagon Industrial 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.| Koryo Credit vs. LG Display | Koryo Credit vs. Hyundai Motor | Koryo Credit vs. Hyundai Motor Co | Koryo Credit vs. Hyundai Motor Co |
| Eagon Industrial vs. Dongbu Insurance Co | Eagon Industrial vs. BNK Financial Group | Eagon Industrial vs. Korean Reinsurance Co | Eagon Industrial vs. Daewoo Engineering Construction |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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