Correlation Between Korea Investment and IQuest Co
Can any of the company-specific risk be diversified away by investing in both Korea Investment and IQuest Co 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 IQuest Co 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 IQuest Co, you can compare the effects of market volatilities on Korea Investment and IQuest Co 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 IQuest Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and IQuest Co.
Diversification Opportunities for Korea Investment and IQuest Co
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Korea and IQuest is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest Co 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 IQuest Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest Co has no effect on the direction of Korea Investment i.e., Korea Investment and IQuest Co go up and down completely randomly.
Pair Corralation between Korea Investment and IQuest Co
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.64 times more return on investment than IQuest Co. However, Korea Investment Holdings is 1.56 times less risky than IQuest Co. It trades about 0.01 of its potential returns per unit of risk. IQuest Co is currently generating about 0.0 per unit of risk. If you would invest 5,300,000 in Korea Investment Holdings on September 25, 2024 and sell it today you would lose (10,000) from holding Korea Investment Holdings or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Korea Investment Holdings vs. IQuest Co
Performance |
| Timeline |
| Korea Investment Holdings |
| IQuest Co |
Korea Investment and IQuest Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and IQuest Co
The main advantage of trading using opposite Korea Investment and IQuest Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment position performs unexpectedly, IQuest Co 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 IQuest Co will offset losses from the drop in IQuest Co's long position.| Korea Investment vs. AptaBio Therapeutics | Korea Investment vs. Wonbang Tech Co | Korea Investment vs. Busan Industrial Co | Korea Investment vs. Busan Ind |
| IQuest Co vs. Samsung Electronics Co | IQuest Co vs. Samsung Electronics Co | IQuest Co vs. LG Energy Solution | IQuest Co vs. SK Hynix |
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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