Correlation Between Kortek and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Kortek and Korea Computer 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 Kortek and Korea Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kortek and Korea Computer Terminal, you can compare the effects of market volatilities on Kortek and Korea Computer 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 Kortek with a short position of Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kortek and Korea Computer.
Diversification Opportunities for Kortek and Korea Computer
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kortek and Korea is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kortek and Korea Computer Terminal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer Terminal and Kortek 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 Kortek are associated (or correlated) with Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer Terminal has no effect on the direction of Kortek i.e., Kortek and Korea Computer go up and down completely randomly.
Pair Corralation between Kortek and Korea Computer
Assuming the 90 days trading horizon Kortek is expected to under-perform the Korea Computer. But the stock apears to be less risky and, when comparing its historical volatility, Kortek is 3.23 times less risky than Korea Computer. The stock trades about -0.04 of its potential returns per unit of risk. The Korea Computer Terminal is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 214,500 in Korea Computer Terminal on August 26, 2024 and sell it today you would earn a total of 7,500 from holding Korea Computer Terminal or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kortek vs. Korea Computer Terminal
Performance |
| Timeline |
| Kortek |
| Korea Computer Terminal |
Kortek and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kortek and Korea Computer
The main advantage of trading using opposite Kortek and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kortek position performs unexpectedly, Korea Computer 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 Computer will offset losses from the drop in Korea Computer's long position.| Kortek vs. Korea Computer Terminal | Kortek vs. Atec Co | Kortek vs. Suprema ID | Kortek vs. Korea Information Engineering |
| Korea Computer vs. Eagle Veterinary Technology | Korea Computer vs. DSC Investment | Korea Computer vs. PH Tech Co | Korea Computer vs. Sungchang Autotech Co |
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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