Correlation Between ChipsMedia and Korea Real
Can any of the company-specific risk be diversified away by investing in both ChipsMedia 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 ChipsMedia and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and Korea Real Estate, you can compare the effects of market volatilities on ChipsMedia 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 ChipsMedia with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and Korea Real.
Diversification Opportunities for ChipsMedia and Korea Real
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ChipsMedia and Korea is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia 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 ChipsMedia 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 ChipsMedia 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 ChipsMedia i.e., ChipsMedia and Korea Real go up and down completely randomly.
Pair Corralation between ChipsMedia and Korea Real
Assuming the 90 days trading horizon ChipsMedia is expected to generate 4.85 times more return on investment than Korea Real. However, ChipsMedia is 4.85 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 -0.05 per unit of risk. If you would invest 929,137 in ChipsMedia on August 27, 2024 and sell it today you would earn a total of 474,863 from holding ChipsMedia or generate 51.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. Korea Real Estate
Performance |
| Timeline |
| ChipsMedia |
| Korea Real Estate |
ChipsMedia and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and Korea Real
The main advantage of trading using opposite ChipsMedia and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia 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.| ChipsMedia vs. Korea Real Estate | ChipsMedia vs. Korea Ratings Co | ChipsMedia vs. IQuest Co | ChipsMedia vs. Wonbang Tech Co |
| Korea Real vs. Samsung Electronics Co | Korea Real vs. Samsung Electronics Co | Korea Real vs. LG Energy Solution | Korea Real vs. SK Hynix |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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