Correlation Between Korea Investment and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Korea Investment and Myoung Shin 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 Myoung Shin 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 Myoung Shin Industrial, you can compare the effects of market volatilities on Korea Investment and Myoung Shin 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 Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Myoung Shin.
Diversification Opportunities for Korea Investment and Myoung Shin
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Myoung is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin 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 Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Korea Investment i.e., Korea Investment and Myoung Shin go up and down completely randomly.
Pair Corralation between Korea Investment and Myoung Shin
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.48 times more return on investment than Myoung Shin. However, Korea Investment Holdings is 2.09 times less risky than Myoung Shin. It trades about 0.14 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about 0.02 per unit of risk. If you would invest 4,545,000 in Korea Investment Holdings on November 3, 2024 and sell it today you would earn a total of 1,155,000 from holding Korea Investment Holdings or generate 25.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. Myoung Shin Industrial
Performance |
| Timeline |
| Korea Investment Holdings |
| Myoung Shin Industrial |
Korea Investment and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Myoung Shin
The main advantage of trading using opposite Korea Investment and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Korea Investment vs. Namhwa Industrial Co | Korea Investment vs. KG Eco Technology | Korea Investment vs. Daejung Chemicals Metals | Korea Investment vs. ENF Technology Co |
| Myoung Shin vs. Busan Industrial Co | Myoung Shin vs. Busan Ind | Myoung Shin vs. Mirae Asset Daewoo | Myoung Shin vs. Shinhan WTI Futures |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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