Correlation Between Mobile Appliance and Korea Information
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and Korea Information 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 Mobile Appliance and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Korea Information Communications, you can compare the effects of market volatilities on Mobile Appliance and Korea Information 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 Mobile Appliance with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Korea Information.
Diversification Opportunities for Mobile Appliance and Korea Information
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mobile and Korea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and Mobile Appliance 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 Mobile Appliance are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and Korea Information go up and down completely randomly.
Pair Corralation between Mobile Appliance and Korea Information
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 2.95 times more return on investment than Korea Information. However, Mobile Appliance is 2.95 times more volatile than Korea Information Communications. It trades about -0.01 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.15 per unit of risk. If you would invest 205,000 in Mobile Appliance on September 14, 2024 and sell it today you would lose (5,900) from holding Mobile Appliance or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Appliance vs. Korea Information Communicatio
Performance |
| Timeline |
| Mobile Appliance |
| Korea Information |
Mobile Appliance and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Korea Information
The main advantage of trading using opposite Mobile Appliance and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. Samsung Electronics Co | Mobile Appliance vs. LG Energy Solution | Mobile Appliance vs. SK Hynix |
| Korea Information vs. Cube Entertainment | Korea Information vs. Dreamus Company | Korea Information vs. LG Energy Solution | Korea Information vs. Dongwon System |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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