Correlation Between Koryo Credit and Dongwon Metal
Can any of the company-specific risk be diversified away by investing in both Koryo Credit and Dongwon 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 Koryo Credit and Dongwon Metal 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 Dongwon Metal Co, you can compare the effects of market volatilities on Koryo Credit and Dongwon 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 Koryo Credit with a short position of Dongwon Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Dongwon Metal.
Diversification Opportunities for Koryo Credit and Dongwon Metal
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Koryo and Dongwon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Dongwon Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Metal 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 Dongwon Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Metal has no effect on the direction of Koryo Credit i.e., Koryo Credit and Dongwon Metal go up and down completely randomly.
Pair Corralation between Koryo Credit and Dongwon Metal
Assuming the 90 days trading horizon Koryo Credit Information is expected to generate 0.57 times more return on investment than Dongwon Metal. However, Koryo Credit Information is 1.75 times less risky than Dongwon Metal. It trades about 0.05 of its potential returns per unit of risk. Dongwon Metal Co is currently generating about -0.15 per unit of risk. If you would invest 989,000 in Koryo Credit Information on August 28, 2024 and sell it today you would earn a total of 13,000 from holding Koryo Credit Information or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Dongwon Metal Co
Performance |
| Timeline |
| Koryo Credit Information |
| Dongwon Metal |
Koryo Credit and Dongwon Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Dongwon Metal
The main advantage of trading using opposite Koryo Credit and Dongwon Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit position performs unexpectedly, Dongwon 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 Dongwon Metal will offset losses from the drop in Dongwon Metal's long position.| Koryo Credit vs. Eagle Veterinary Technology | Koryo Credit vs. Daou Technology | Koryo Credit vs. NewFlex Technology Co | Koryo Credit vs. Puloon Technology |
| Dongwon Metal vs. Automobile Pc | Dongwon Metal vs. KB Financial Group | Dongwon Metal vs. Koryo Credit Information | Dongwon Metal vs. Samsung Life Insurance |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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