Correlation Between System and Kolon Plastics
Can any of the company-specific risk be diversified away by investing in both System and Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics, you can compare the effects of market volatilities on System and Kolon Plastics 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 Kolon Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of System and Kolon Plastics.
Diversification Opportunities for System and Kolon Plastics
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between System and Kolon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding System and Application and Kolon Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Plastics 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 Kolon Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Plastics has no effect on the direction of System i.e., System and Kolon Plastics go up and down completely randomly.
Pair Corralation between System and Kolon Plastics
Assuming the 90 days trading horizon System and Application is expected to generate 1.28 times more return on investment than Kolon Plastics. However, System is 1.28 times more volatile than Kolon Plastics. It trades about -0.01 of its potential returns per unit of risk. Kolon Plastics is currently generating about -0.04 per unit of risk. If you would invest 234,542 in System and Application on October 16, 2024 and sell it today you would lose (73,142) from holding System and Application or give up 31.19% 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. Kolon Plastics
Performance |
| Timeline |
| System and Application |
| Kolon Plastics |
System and Kolon Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System and Kolon Plastics
The main advantage of trading using opposite System and Kolon Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System position performs unexpectedly, Kolon Plastics 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 Kolon Plastics will offset losses from the drop in Kolon Plastics' long position.| System vs. Daejung Chemicals Metals | System vs. Daishin Information Communications | System vs. Hyundai Industrial Co | System vs. Drb Industrial |
| Kolon Plastics vs. CU Medical Systems | Kolon Plastics vs. Green Cross Medical | Kolon Plastics vs. BIT Computer Co | Kolon Plastics 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.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |