Correlation Between Koryo Credit and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Koryo Credit and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on Koryo Credit and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Korea Alcohol.
Diversification Opportunities for Koryo Credit and Korea Alcohol
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koryo and Korea is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Koryo Credit i.e., Koryo Credit and Korea Alcohol go up and down completely randomly.
Pair Corralation between Koryo Credit and Korea Alcohol
Assuming the 90 days trading horizon Koryo Credit Information is expected to under-perform the Korea Alcohol. But the stock apears to be less risky and, when comparing its historical volatility, Koryo Credit Information is 1.53 times less risky than Korea Alcohol. The stock trades about -0.16 of its potential returns per unit of risk. The Korea Alcohol Industrial is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 792,112 in Korea Alcohol Industrial on October 16, 2024 and sell it today you would earn a total of 65,888 from holding Korea Alcohol Industrial or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Koryo Credit Information |
| Korea Alcohol Industrial |
Koryo Credit and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Korea Alcohol
The main advantage of trading using opposite Koryo Credit and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit position performs unexpectedly, Korea Alcohol 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 Alcohol will offset losses from the drop in Korea Alcohol's long position.| Koryo Credit vs. Nable Communications | Koryo Credit vs. Digital Power Communications | Koryo Credit vs. Korea Information Communications | Koryo Credit vs. Formetal Co |
| Korea Alcohol vs. Innowireless Co | Korea Alcohol vs. Koryo Credit Information | Korea Alcohol vs. NICE Information Service | Korea Alcohol vs. System and Application |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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