Correlation Between Adaptive Plasma and KakaoBank Corp
Can any of the company-specific risk be diversified away by investing in both Adaptive Plasma and KakaoBank Corp 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 Adaptive Plasma and KakaoBank Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaptive Plasma Technology and KakaoBank Corp, you can compare the effects of market volatilities on Adaptive Plasma and KakaoBank Corp 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 Adaptive Plasma with a short position of KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaptive Plasma and KakaoBank Corp.
Diversification Opportunities for Adaptive Plasma and KakaoBank Corp
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adaptive and KakaoBank is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Adaptive Plasma Technology and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank Corp and Adaptive Plasma 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 Adaptive Plasma Technology are associated (or correlated) with KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Adaptive Plasma i.e., Adaptive Plasma and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Adaptive Plasma and KakaoBank Corp
Assuming the 90 days trading horizon Adaptive Plasma Technology is expected to under-perform the KakaoBank Corp. In addition to that, Adaptive Plasma is 1.45 times more volatile than KakaoBank Corp. It trades about -0.07 of its total potential returns per unit of risk. KakaoBank Corp is currently generating about -0.01 per unit of volatility. If you would invest 2,690,000 in KakaoBank Corp on September 12, 2024 and sell it today you would lose (275,000) from holding KakaoBank Corp or give up 10.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adaptive Plasma Technology vs. KakaoBank Corp
Performance |
| Timeline |
| Adaptive Plasma Tech |
| KakaoBank Corp |
Adaptive Plasma and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaptive Plasma and KakaoBank Corp
The main advantage of trading using opposite Adaptive Plasma and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaptive Plasma position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Adaptive Plasma vs. Hankook Steel Co | Adaptive Plasma vs. J Steel Co | Adaptive Plasma vs. Moonbae Steel | Adaptive Plasma vs. LG Display Co |
| KakaoBank Corp vs. Daishin Information Communications | KakaoBank Corp vs. Dongbang Transport Logistics | KakaoBank Corp vs. SCI Information Service | KakaoBank Corp vs. Dongil Metal 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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