Correlation Between Korea New and GiantStep
Can any of the company-specific risk be diversified away by investing in both Korea New and GiantStep 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 GiantStep 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 GiantStep Co, you can compare the effects of market volatilities on Korea New and GiantStep 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 GiantStep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and GiantStep.
Diversification Opportunities for Korea New and GiantStep
Average diversification
The 3 months correlation between Korea and GiantStep is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and GiantStep Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiantStep 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 GiantStep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiantStep has no effect on the direction of Korea New i.e., Korea New and GiantStep go up and down completely randomly.
Pair Corralation between Korea New and GiantStep
Assuming the 90 days trading horizon Korea New Network is expected to under-perform the GiantStep. But the stock apears to be less risky and, when comparing its historical volatility, Korea New Network is 2.52 times less risky than GiantStep. The stock trades about -0.07 of its potential returns per unit of risk. The GiantStep Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 622,000 in GiantStep Co on October 24, 2024 and sell it today you would lose (2,000) from holding GiantStep Co or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Korea New Network vs. GiantStep Co
Performance |
| Timeline |
| Korea New Network |
| GiantStep |
Korea New and GiantStep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and GiantStep
The main advantage of trading using opposite Korea New and GiantStep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, GiantStep 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 GiantStep will offset losses from the drop in GiantStep's long position.| Korea New vs. Duksan Hi Metal | Korea New vs. Shinhan Inverse Copper | Korea New vs. Kukil Metal Co | Korea New vs. Youngsin Metal Industrial |
| GiantStep vs. SKONEC Entertainment Co | GiantStep vs. Moadata Co | GiantStep vs. TJ media Co | GiantStep vs. System and Application |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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