Correlation Between Korea Investment and KCC
Can any of the company-specific risk be diversified away by investing in both Korea Investment and KCC 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 Investment and KCC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Investment Holdings and KCC Corporation, you can compare the effects of market volatilities on Korea Investment and KCC 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 Investment with a short position of KCC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and KCC.
Diversification Opportunities for Korea Investment and KCC
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and KCC is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and KCC Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Corporation and Korea Investment 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 Investment Holdings are associated (or correlated) with KCC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Corporation has no effect on the direction of Korea Investment i.e., Korea Investment and KCC go up and down completely randomly.
Pair Corralation between Korea Investment and KCC
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.55 times more return on investment than KCC. However, Korea Investment Holdings is 1.82 times less risky than KCC. It trades about 0.08 of its potential returns per unit of risk. KCC Corporation is currently generating about 0.04 per unit of risk. If you would invest 3,746,524 in Korea Investment Holdings on September 12, 2024 and sell it today you would earn a total of 1,633,476 from holding Korea Investment Holdings or generate 43.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. KCC Corp.
Performance |
| Timeline |
| Korea Investment Holdings |
| KCC Corporation |
Korea Investment and KCC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and KCC
The main advantage of trading using opposite Korea Investment and KCC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, KCC 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 KCC will offset losses from the drop in KCC's long position.| Korea Investment vs. LAKE MATERIALS LTD | Korea Investment vs. Hyundai Engineering Plastics | Korea Investment vs. Top Material Co | Korea Investment vs. Kbi Metal Co |
| KCC vs. Cuckoo Homesys Co | KCC vs. Hyundai Home Shopping | KCC vs. Korea Investment Holdings | KCC vs. Samyung Trading 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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