Correlation Between Korea New and AeroSpace Technology
Can any of the company-specific risk be diversified away by investing in both Korea New and AeroSpace Technology 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 AeroSpace Technology 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 AeroSpace Technology of, you can compare the effects of market volatilities on Korea New and AeroSpace Technology 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 AeroSpace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and AeroSpace Technology.
Diversification Opportunities for Korea New and AeroSpace Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and AeroSpace is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and AeroSpace Technology of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroSpace Technology 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 AeroSpace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroSpace Technology has no effect on the direction of Korea New i.e., Korea New and AeroSpace Technology go up and down completely randomly.
Pair Corralation between Korea New and AeroSpace Technology
Assuming the 90 days trading horizon Korea New Network is expected to generate 1.43 times more return on investment than AeroSpace Technology. However, Korea New is 1.43 times more volatile than AeroSpace Technology of. It trades about 0.31 of its potential returns per unit of risk. AeroSpace Technology of is currently generating about -0.12 per unit of risk. If you would invest 74,300 in Korea New Network on September 13, 2024 and sell it today you would earn a total of 16,300 from holding Korea New Network or generate 21.94% 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. AeroSpace Technology of
Performance |
| Timeline |
| Korea New Network |
| AeroSpace Technology |
Korea New and AeroSpace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and AeroSpace Technology
The main advantage of trading using opposite Korea New and AeroSpace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, AeroSpace Technology 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 AeroSpace Technology will offset losses from the drop in AeroSpace Technology's long position.| Korea New vs. CJ Seafood Corp | Korea New vs. FoodNamoo | Korea New vs. FOODWELL Co | Korea New vs. Hankukpackage Co |
| AeroSpace Technology vs. Korea New Network | AeroSpace Technology vs. Solution Advanced Technology | AeroSpace Technology vs. Busan Industrial Co | AeroSpace Technology vs. Busan Ind |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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