Correlation Between Global Standard and Korea Real
Can any of the company-specific risk be diversified away by investing in both Global Standard and Korea Real 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 Global Standard and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Standard Technology and Korea Real Estate, you can compare the effects of market volatilities on Global Standard and Korea Real 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 Global Standard with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and Korea Real.
Diversification Opportunities for Global Standard and Korea Real
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Korea is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate and Global Standard 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 Global Standard Technology are associated (or correlated) with Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Global Standard i.e., Global Standard and Korea Real go up and down completely randomly.
Pair Corralation between Global Standard and Korea Real
Assuming the 90 days trading horizon Global Standard Technology is expected to generate 3.76 times more return on investment than Korea Real. However, Global Standard is 3.76 times more volatile than Korea Real Estate. It trades about 0.04 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.04 per unit of risk. If you would invest 1,078,492 in Global Standard Technology on August 25, 2024 and sell it today you would earn a total of 399,508 from holding Global Standard Technology or generate 37.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Standard Technology vs. Korea Real Estate
Performance |
| Timeline |
| Global Standard Tech |
| Korea Real Estate |
Global Standard and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Standard and Korea Real
The main advantage of trading using opposite Global Standard and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Standard position performs unexpectedly, Korea Real 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 Real will offset losses from the drop in Korea Real's long position.| Global Standard vs. Insung Information Co | Global Standard vs. Korea Information Engineering | Global Standard vs. Lotte Data Communication | Global Standard vs. Tuksu Engineering ConstructionLtd |
| Korea Real vs. Lion Chemtech Co | Korea Real vs. Ssangyong Information Communication | Korea Real vs. LG Household Healthcare | Korea Real vs. Vitzro Tech Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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