Correlation Between System and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both System and Korea Alcohol 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 System and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between System and Application and Korea Alcohol Industrial, you can compare the effects of market volatilities on System and Korea Alcohol 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 System with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of System and Korea Alcohol.
Diversification Opportunities for System and Korea Alcohol
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between System and Korea is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding System and Application and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and System 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 System and Application are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of System i.e., System and Korea Alcohol go up and down completely randomly.
Pair Corralation between System and Korea Alcohol
Assuming the 90 days trading horizon System and Application is expected to under-perform the Korea Alcohol. In addition to that, System is 2.07 times more volatile than Korea Alcohol Industrial. It trades about -0.04 of its total potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.06 per unit of volatility. If you would invest 1,089,226 in Korea Alcohol Industrial on October 16, 2024 and sell it today you would lose (231,226) from holding Korea Alcohol Industrial or give up 21.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
System and Application vs. Korea Alcohol Industrial
Performance |
| Timeline |
| System and Application |
| Korea Alcohol Industrial |
System and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System and Korea Alcohol
The main advantage of trading using opposite System and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System position performs unexpectedly, Korea Alcohol 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 Alcohol will offset losses from the drop in Korea Alcohol's long position.| System vs. Daejung Chemicals Metals | System vs. Daishin Information Communications | System vs. Hyundai Industrial Co | System vs. Drb Industrial |
| Korea Alcohol vs. Innowireless Co | Korea Alcohol vs. Koryo Credit Information | Korea Alcohol vs. NICE Information Service | Korea Alcohol 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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