Correlation Between AnterogenCoLtd and Korean Drug
Can any of the company-specific risk be diversified away by investing in both AnterogenCoLtd and Korean Drug 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 AnterogenCoLtd and Korean Drug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AnterogenCoLtd and Korean Drug Co, you can compare the effects of market volatilities on AnterogenCoLtd and Korean Drug 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 AnterogenCoLtd with a short position of Korean Drug. Check out your portfolio center. Please also check ongoing floating volatility patterns of AnterogenCoLtd and Korean Drug.
Diversification Opportunities for AnterogenCoLtd and Korean Drug
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AnterogenCoLtd and Korean is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AnterogenCoLtd and Korean Drug Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Drug and AnterogenCoLtd 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 AnterogenCoLtd are associated (or correlated) with Korean Drug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Drug has no effect on the direction of AnterogenCoLtd i.e., AnterogenCoLtd and Korean Drug go up and down completely randomly.
Pair Corralation between AnterogenCoLtd and Korean Drug
Assuming the 90 days trading horizon AnterogenCoLtd is expected to generate 1.66 times more return on investment than Korean Drug. However, AnterogenCoLtd is 1.66 times more volatile than Korean Drug Co. It trades about 0.01 of its potential returns per unit of risk. Korean Drug Co is currently generating about -0.02 per unit of risk. If you would invest 2,080,000 in AnterogenCoLtd on November 27, 2024 and sell it today you would lose (249,000) from holding AnterogenCoLtd or give up 11.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AnterogenCoLtd vs. Korean Drug Co
Performance |
| Timeline |
| AnterogenCoLtd |
| Korean Drug |
AnterogenCoLtd and Korean Drug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AnterogenCoLtd and Korean Drug
The main advantage of trading using opposite AnterogenCoLtd and Korean Drug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AnterogenCoLtd position performs unexpectedly, Korean Drug 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 Korean Drug will offset losses from the drop in Korean Drug's long position.The idea behind AnterogenCoLtd and Korean Drug Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Korean Drug vs. Inzi Display CoLtd | Korean Drug vs. InnoTherapy | Korean Drug vs. Hannong Chemicals | Korean Drug vs. SK Chemicals Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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