Correlation Between Korea New and A Tech
Can any of the company-specific risk be diversified away by investing in both Korea New and A Tech 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 A Tech 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 A Tech Solution Co, you can compare the effects of market volatilities on Korea New and A Tech 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 A Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and A Tech.
Diversification Opportunities for Korea New and A Tech
Good diversification
The 3 months correlation between Korea and 071670 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and A Tech Solution Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Tech Solution 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 A Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Tech Solution has no effect on the direction of Korea New i.e., Korea New and A Tech go up and down completely randomly.
Pair Corralation between Korea New and A Tech
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.75 times more return on investment than A Tech. However, Korea New Network is 1.33 times less risky than A Tech. It trades about 0.0 of its potential returns per unit of risk. A Tech Solution Co is currently generating about -0.02 per unit of risk. If you would invest 87,202 in Korea New Network on September 2, 2024 and sell it today you would lose (10,102) from holding Korea New Network or give up 11.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. A Tech Solution Co
Performance |
| Timeline |
| Korea New Network |
| A Tech Solution |
Korea New and A Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and A Tech
The main advantage of trading using opposite Korea New and A Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, A Tech 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 A Tech will offset losses from the drop in A Tech's long position.| Korea New vs. Hanshin Construction Co | Korea New vs. Netmarble Games Corp | Korea New vs. Seohee Construction Co | Korea New vs. Sungdo Engineering Construction |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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