Correlation Between Korea Computer and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Korea Computer and GS Engineering 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 Korea Computer and GS Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and GS Engineering Construction, you can compare the effects of market volatilities on Korea Computer and GS Engineering 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 Korea Computer with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and GS Engineering.
Diversification Opportunities for Korea Computer and GS Engineering
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and 006360 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const and Korea Computer 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 Korea Computer are associated (or correlated) with GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Korea Computer i.e., Korea Computer and GS Engineering go up and down completely randomly.
Pair Corralation between Korea Computer and GS Engineering
Assuming the 90 days trading horizon Korea Computer is expected to under-perform the GS Engineering. In addition to that, Korea Computer is 1.5 times more volatile than GS Engineering Construction. It trades about -0.04 of its total potential returns per unit of risk. GS Engineering Construction is currently generating about 0.22 per unit of volatility. If you would invest 1,770,000 in GS Engineering Construction on September 3, 2024 and sell it today you would earn a total of 178,000 from holding GS Engineering Construction or generate 10.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. GS Engineering Construction
Performance |
| Timeline |
| Korea Computer |
| GS Engineering Const |
Korea Computer and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and GS Engineering
The main advantage of trading using opposite Korea Computer and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Korea Computer vs. Dongsin Engineering Construction | Korea Computer vs. Doosan Fuel Cell | Korea Computer vs. Daishin Balance 1 | Korea Computer vs. Total Soft Bank |
| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |