Correlation Between Insun Environment and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Insun Environment and Korea Investment 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 Insun Environment and Korea Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insun Environment New and Korea Investment Holdings, you can compare the effects of market volatilities on Insun Environment and Korea Investment 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 Insun Environment with a short position of Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insun Environment and Korea Investment.
Diversification Opportunities for Insun Environment and Korea Investment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insun and Korea is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Insun Environment New and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings and Insun Environment 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 Insun Environment New are associated (or correlated) with Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Insun Environment i.e., Insun Environment and Korea Investment go up and down completely randomly.
Pair Corralation between Insun Environment and Korea Investment
Assuming the 90 days trading horizon Insun Environment is expected to generate 7.05 times less return on investment than Korea Investment. In addition to that, Insun Environment is 1.83 times more volatile than Korea Investment Holdings. It trades about 0.0 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.05 per unit of volatility. If you would invest 5,220,000 in Korea Investment Holdings on October 14, 2024 and sell it today you would earn a total of 190,000 from holding Korea Investment Holdings or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insun Environment New vs. Korea Investment Holdings
Performance |
| Timeline |
| Insun Environment New |
| Korea Investment Holdings |
Insun Environment and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insun Environment and Korea Investment
The main advantage of trading using opposite Insun Environment and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insun Environment position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment's long position.| Insun Environment vs. T3 Entertainment Co | Insun Environment vs. Alton Sports CoLtd | Insun Environment vs. SM Entertainment Co | Insun Environment vs. CU Medical Systems |
| Korea Investment vs. Insun Environment New | Korea Investment vs. Jeju Beer Co | Korea Investment vs. Han Kook Steel | Korea Investment vs. Lotte Data Communication |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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