Correlation Between Korea New and KB No4
Can any of the company-specific risk be diversified away by investing in both Korea New and KB No4 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 KB No4 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 KB No4 SPAC, you can compare the effects of market volatilities on Korea New and KB No4 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 KB No4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and KB No4.
Diversification Opportunities for Korea New and KB No4
Very good diversification
The 3 months correlation between Korea and 205500 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and KB No4 SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB No4 SPAC 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 KB No4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB No4 SPAC has no effect on the direction of Korea New i.e., Korea New and KB No4 go up and down completely randomly.
Pair Corralation between Korea New and KB No4
Assuming the 90 days trading horizon Korea New Network is expected to generate 1.12 times more return on investment than KB No4. However, Korea New is 1.12 times more volatile than KB No4 SPAC. It trades about -0.12 of its potential returns per unit of risk. KB No4 SPAC is currently generating about -0.33 per unit of risk. If you would invest 81,300 in Korea New Network on September 3, 2024 and sell it today you would lose (4,200) from holding Korea New Network or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. KB No4 SPAC
Performance |
| Timeline |
| Korea New Network |
| KB No4 SPAC |
Korea New and KB No4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and KB No4
The main advantage of trading using opposite Korea New and KB No4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, KB No4 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 KB No4 will offset losses from the drop in KB No4's long position.| Korea New vs. Daejoo Electronic Materials | Korea New vs. Lake Materials Co | Korea New vs. Lotte Energy Materials | Korea New vs. EV Advanced Material |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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