Correlation Between Koryo Credit and Settlebank
Can any of the company-specific risk be diversified away by investing in both Koryo Credit and Settlebank 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 Settlebank 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 Settlebank, you can compare the effects of market volatilities on Koryo Credit and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Settlebank.
Diversification Opportunities for Koryo Credit and Settlebank
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Koryo and Settlebank is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Koryo Credit i.e., Koryo Credit and Settlebank go up and down completely randomly.
Pair Corralation between Koryo Credit and Settlebank
Assuming the 90 days trading horizon Koryo Credit Information is expected to generate 0.49 times more return on investment than Settlebank. However, Koryo Credit Information is 2.02 times less risky than Settlebank. It trades about 0.01 of its potential returns per unit of risk. Settlebank is currently generating about -0.02 per unit of risk. If you would invest 1,015,092 in Koryo Credit Information on September 2, 2024 and sell it today you would earn a total of 15,908 from holding Koryo Credit Information or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Settlebank
Performance |
| Timeline |
| Koryo Credit Information |
| Settlebank |
Koryo Credit and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Settlebank
The main advantage of trading using opposite Koryo Credit and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Koryo Credit vs. Lotte Energy Materials | Koryo Credit vs. Lotte Data Communication | Koryo Credit vs. Nable Communications | Koryo Credit vs. Hana Materials |
| Settlebank vs. Busan Industrial Co | Settlebank vs. Busan Ind | Settlebank vs. Mirae Asset Daewoo | Settlebank vs. Finebesteel |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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