Correlation Between Korea Computer and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Korea Computer and Eagle Veterinary 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 Computer and Eagle Veterinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer Terminal and Eagle Veterinary Technology, you can compare the effects of market volatilities on Korea Computer and Eagle Veterinary 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 Computer with a short position of Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Eagle Veterinary.
Diversification Opportunities for Korea Computer and Eagle Veterinary
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Eagle is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer Terminal and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec and Korea Computer 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 Computer Terminal are associated (or correlated) with Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Korea Computer i.e., Korea Computer and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Korea Computer and Eagle Veterinary
Assuming the 90 days trading horizon Korea Computer Terminal is expected to generate 3.3 times more return on investment than Eagle Veterinary. However, Korea Computer is 3.3 times more volatile than Eagle Veterinary Technology. It trades about 0.05 of its potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.09 per unit of risk. If you would invest 214,500 in Korea Computer Terminal on August 26, 2024 and sell it today you would earn a total of 7,500 from holding Korea Computer Terminal or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer Terminal vs. Eagle Veterinary Technology
Performance |
| Timeline |
| Korea Computer Terminal |
| Eagle Veterinary Tec |
Korea Computer and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Eagle Veterinary
The main advantage of trading using opposite Korea Computer and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Korea Computer vs. Eagle Veterinary Technology | Korea Computer vs. DSC Investment | Korea Computer vs. PH Tech Co | Korea Computer vs. Sungchang Autotech Co |
| Eagle Veterinary vs. Kolon Life Science | Eagle Veterinary vs. Aminologics CoLtd | Eagle Veterinary vs. Daihan Pharmaceutical CoLtd | Eagle Veterinary vs. Withuspharmaceutical CoLtd |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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