Correlation Between Korea New and ISU Chemical
Can any of the company-specific risk be diversified away by investing in both Korea New and ISU Chemical 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 New and ISU Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and ISU Chemical Co, you can compare the effects of market volatilities on Korea New and ISU Chemical 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 New with a short position of ISU Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and ISU Chemical.
Diversification Opportunities for Korea New and ISU Chemical
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and ISU is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and ISU Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISU Chemical and Korea New 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 New Network are associated (or correlated) with ISU Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISU Chemical has no effect on the direction of Korea New i.e., Korea New and ISU Chemical go up and down completely randomly.
Pair Corralation between Korea New and ISU Chemical
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.84 times more return on investment than ISU Chemical. However, Korea New Network is 1.19 times less risky than ISU Chemical. It trades about 0.22 of its potential returns per unit of risk. ISU Chemical Co is currently generating about -0.15 per unit of risk. If you would invest 78,000 in Korea New Network on September 12, 2024 and sell it today you would earn a total of 12,600 from holding Korea New Network or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. ISU Chemical Co
Performance |
| Timeline |
| Korea New Network |
| ISU Chemical |
Korea New and ISU Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and ISU Chemical
The main advantage of trading using opposite Korea New and ISU Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, ISU Chemical 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 ISU Chemical will offset losses from the drop in ISU Chemical's long position.| Korea New vs. BGF Retail Co | Korea New vs. LG Display Co | Korea New vs. Grand Korea Leisure | Korea New vs. Lake Materials Co |
| ISU Chemical vs. Samsung Electronics Co | ISU Chemical vs. Samsung Electronics Co | ISU Chemical vs. SK Hynix | ISU Chemical vs. POSCO Holdings |
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.
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