Correlation Between Korea New and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both Korea New and Atinum Investment 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 Atinum Investment 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 Atinum Investment Co, you can compare the effects of market volatilities on Korea New and Atinum Investment 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 Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and Atinum Investment.
Diversification Opportunities for Korea New and Atinum Investment
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Atinum is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment 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 Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of Korea New i.e., Korea New and Atinum Investment go up and down completely randomly.
Pair Corralation between Korea New and Atinum Investment
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.69 times more return on investment than Atinum Investment. However, Korea New Network is 1.45 times less risky than Atinum Investment. It trades about -0.04 of its potential returns per unit of risk. Atinum Investment Co is currently generating about -0.05 per unit of risk. If you would invest 80,000 in Korea New Network on August 29, 2024 and sell it today you would lose (1,900) from holding Korea New Network or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. Atinum Investment Co
Performance |
| Timeline |
| Korea New Network |
| Atinum Investment |
Korea New and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and Atinum Investment
The main advantage of trading using opposite Korea New and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| Korea New vs. Lotte Data Communication | Korea New vs. Samlip General Foods | Korea New vs. Hyundai Green Food | Korea New vs. CJ Seafood Corp |
| Atinum Investment vs. Korea New Network | Atinum Investment vs. Dong A Eltek | Atinum Investment vs. Dreamus Company | Atinum Investment vs. SK Bioscience 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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