Correlation Between Korea Computer and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Korea Computer and Kaonmedia 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 Kaonmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and Kaonmedia Co, you can compare the effects of market volatilities on Korea Computer and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Kaonmedia.
Diversification Opportunities for Korea Computer and Kaonmedia
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Kaonmedia is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of Korea Computer i.e., Korea Computer and Kaonmedia go up and down completely randomly.
Pair Corralation between Korea Computer and Kaonmedia
Assuming the 90 days trading horizon Korea Computer is expected to generate 0.85 times more return on investment than Kaonmedia. However, Korea Computer is 1.18 times less risky than Kaonmedia. It trades about 0.18 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.07 per unit of risk. If you would invest 490,500 in Korea Computer on August 27, 2024 and sell it today you would earn a total of 54,500 from holding Korea Computer or generate 11.11% 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. Kaonmedia Co
Performance |
| Timeline |
| Korea Computer |
| Kaonmedia |
Korea Computer and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Kaonmedia
The main advantage of trading using opposite Korea Computer and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| Korea Computer vs. Korea Real Estate | Korea Computer vs. Korea Ratings Co | Korea Computer vs. IQuest Co | Korea Computer vs. Wonbang Tech Co |
| Kaonmedia vs. Korea Real Estate | Kaonmedia vs. Korea Ratings Co | Kaonmedia vs. IQuest Co | Kaonmedia vs. Wonbang Tech 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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