Correlation Between Korea Investment and GenoFocus
Can any of the company-specific risk be diversified away by investing in both Korea Investment and GenoFocus 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 GenoFocus 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 GenoFocus, you can compare the effects of market volatilities on Korea Investment and GenoFocus 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 GenoFocus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and GenoFocus.
Diversification Opportunities for Korea Investment and GenoFocus
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and GenoFocus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and GenoFocus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GenoFocus 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 GenoFocus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GenoFocus has no effect on the direction of Korea Investment i.e., Korea Investment and GenoFocus go up and down completely randomly.
Pair Corralation between Korea Investment and GenoFocus
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.39 times more return on investment than GenoFocus. However, Korea Investment Holdings is 2.57 times less risky than GenoFocus. It trades about 0.14 of its potential returns per unit of risk. GenoFocus is currently generating about 0.05 per unit of risk. If you would invest 5,280,000 in Korea Investment Holdings on September 15, 2024 and sell it today you would earn a total of 280,000 from holding Korea Investment Holdings or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. GenoFocus
Performance |
| Timeline |
| Korea Investment Holdings |
| GenoFocus |
Korea Investment and GenoFocus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and GenoFocus
The main advantage of trading using opposite Korea Investment and GenoFocus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, GenoFocus 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 GenoFocus will offset losses from the drop in GenoFocus' long position.| Korea Investment vs. Samsung Electronics Co | Korea Investment vs. Samsung Electronics Co | Korea Investment vs. SK Hynix | Korea Investment vs. POSCO Holdings |
| GenoFocus vs. Foodnamoo | GenoFocus vs. Korea Investment Holdings | GenoFocus vs. Sempio Foods Co | GenoFocus vs. E Investment Development |
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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