Correlation Between Korea New and ICD
Can any of the company-specific risk be diversified away by investing in both Korea New and ICD 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 ICD 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 ICD Co, you can compare the effects of market volatilities on Korea New and ICD 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 ICD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and ICD.
Diversification Opportunities for Korea New and ICD
Very good diversification
The 3 months correlation between Korea and ICD is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and ICD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICD Co 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 ICD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICD Co has no effect on the direction of Korea New i.e., Korea New and ICD go up and down completely randomly.
Pair Corralation between Korea New and ICD
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.75 times more return on investment than ICD. However, Korea New Network is 1.33 times less risky than ICD. It trades about 0.06 of its potential returns per unit of risk. ICD Co is currently generating about -0.28 per unit of risk. If you would invest 76,200 in Korea New Network on August 27, 2024 and sell it today you would earn a total of 2,500 from holding Korea New Network or generate 3.28% 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. ICD Co
Performance |
| Timeline |
| Korea New Network |
| ICD Co |
Korea New and ICD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and ICD
The main advantage of trading using opposite Korea New and ICD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, ICD 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 ICD will offset losses from the drop in ICD's long position.| Korea New vs. Samsung Electronics Co | Korea New vs. Samsung Electronics Co | Korea New vs. LG Energy Solution | Korea New vs. SK Hynix |
| ICD vs. Samsung Electronics Co | ICD vs. Samsung Electronics Co | ICD vs. LG Energy Solution | ICD vs. SK Hynix |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |