Correlation Between Korea Investment and Songwon Industrial
Can any of the company-specific risk be diversified away by investing in both Korea Investment and Songwon Industrial 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 Songwon Industrial 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 Songwon Industrial Co, you can compare the effects of market volatilities on Korea Investment and Songwon Industrial 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 Songwon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Songwon Industrial.
Diversification Opportunities for Korea Investment and Songwon Industrial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Korea and Songwon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and Songwon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songwon Industrial 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 Songwon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songwon Industrial has no effect on the direction of Korea Investment i.e., Korea Investment and Songwon Industrial go up and down completely randomly.
Pair Corralation between Korea Investment and Songwon Industrial
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.31 times more return on investment than Songwon Industrial. However, Korea Investment Holdings is 3.27 times less risky than Songwon Industrial. It trades about 0.1 of its potential returns per unit of risk. Songwon Industrial Co is currently generating about -0.37 per unit of risk. If you would invest 5,300,000 in Korea Investment Holdings on August 31, 2024 and sell it today you would earn a total of 110,000 from holding Korea Investment Holdings or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. Songwon Industrial Co
Performance |
| Timeline |
| Korea Investment Holdings |
| Songwon Industrial |
Korea Investment and Songwon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Songwon Industrial
The main advantage of trading using opposite Korea Investment and Songwon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, Songwon Industrial 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 Songwon Industrial will offset losses from the drop in Songwon Industrial's long position.| Korea Investment vs. AptaBio Therapeutics | Korea Investment vs. Daewoo SBI SPAC | Korea Investment vs. Dream Security co | Korea Investment vs. Microfriend |
| Songwon Industrial vs. AptaBio Therapeutics | Songwon Industrial vs. Daewoo SBI SPAC | Songwon Industrial vs. Dream Security co | Songwon Industrial vs. Microfriend |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |