Correlation Between Koh Young and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Koh Young and Jeong Moon 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 Koh Young and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koh Young Technology and Jeong Moon Information, you can compare the effects of market volatilities on Koh Young and Jeong Moon 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 Koh Young with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and Jeong Moon.
Diversification Opportunities for Koh Young and Jeong Moon
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Koh and Jeong is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and Koh Young 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 Koh Young Technology are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Koh Young i.e., Koh Young and Jeong Moon go up and down completely randomly.
Pair Corralation between Koh Young and Jeong Moon
Assuming the 90 days trading horizon Koh Young Technology is expected to generate 1.89 times more return on investment than Jeong Moon. However, Koh Young is 1.89 times more volatile than Jeong Moon Information. It trades about 0.01 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.03 per unit of risk. If you would invest 1,735,854 in Koh Young Technology on October 30, 2024 and sell it today you would lose (155,854) from holding Koh Young Technology or give up 8.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. Jeong Moon Information
Performance |
| Timeline |
| Koh Young Technology |
| Jeong Moon Information |
Koh Young and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and Jeong Moon
The main advantage of trading using opposite Koh Young and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.The idea behind Koh Young Technology and Jeong Moon Information pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jeong Moon vs. TJ media Co | Jeong Moon vs. Digital Multimedia Technology | Jeong Moon vs. Youngbo Chemical Co | Jeong Moon vs. MEDIANA 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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