Correlation Between Vissem Electronics and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Vissem Electronics and Korea Investment 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 Vissem Electronics and Korea Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vissem Electronics Co and Korea Investment Holdings, you can compare the effects of market volatilities on Vissem Electronics and Korea Investment 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 Vissem Electronics with a short position of Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vissem Electronics and Korea Investment.
Diversification Opportunities for Vissem Electronics and Korea Investment
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vissem and Korea is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Vissem Electronics Co and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings and Vissem Electronics 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 Vissem Electronics Co are associated (or correlated) with Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Vissem Electronics i.e., Vissem Electronics and Korea Investment go up and down completely randomly.
Pair Corralation between Vissem Electronics and Korea Investment
Assuming the 90 days trading horizon Vissem Electronics Co is expected to generate 0.92 times more return on investment than Korea Investment. However, Vissem Electronics Co is 1.08 times less risky than Korea Investment. It trades about 0.2 of its potential returns per unit of risk. Korea Investment Holdings is currently generating about -0.09 per unit of risk. If you would invest 357,500 in Vissem Electronics Co on October 14, 2024 and sell it today you would earn a total of 17,500 from holding Vissem Electronics Co or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vissem Electronics Co vs. Korea Investment Holdings
Performance |
| Timeline |
| Vissem Electronics |
| Korea Investment Holdings |
Vissem Electronics and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vissem Electronics and Korea Investment
The main advantage of trading using opposite Vissem Electronics and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vissem Electronics position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment's long position.| Vissem Electronics vs. Youngchang Chemical Co | Vissem Electronics vs. INNOX Advanced Materials | Vissem Electronics vs. SH Energy Chemical | Vissem Electronics vs. Youl Chon Chemical |
| Korea Investment vs. Insun Environment New | Korea Investment vs. Jeju Beer Co | Korea Investment vs. Han Kook Steel | Korea Investment vs. Lotte Data Communication |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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