Correlation Between Koh Young and Korea New
Can any of the company-specific risk be diversified away by investing in both Koh Young and Korea New 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 Korea New 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 Korea New Network, you can compare the effects of market volatilities on Koh Young and Korea New 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 Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and Korea New.
Diversification Opportunities for Koh Young and Korea New
Significant diversification
The 3 months correlation between Koh and Korea is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Koh Young i.e., Koh Young and Korea New go up and down completely randomly.
Pair Corralation between Koh Young and Korea New
Assuming the 90 days trading horizon Koh Young Technology is expected to under-perform the Korea New. In addition to that, Koh Young is 1.61 times more volatile than Korea New Network. It trades about -0.01 of its total potential returns per unit of risk. Korea New Network is currently generating about 0.0 per unit of volatility. If you would invest 87,202 in Korea New Network on September 2, 2024 and sell it today you would lose (10,102) from holding Korea New Network or give up 11.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. Korea New Network
Performance |
| Timeline |
| Koh Young Technology |
| Korea New Network |
Koh Young and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and Korea New
The main advantage of trading using opposite Koh Young and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, Korea New 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 New will offset losses from the drop in Korea New's long position.| Koh Young vs. Dongsin Engineering Construction | Koh Young vs. Doosan Fuel Cell | Koh Young vs. Daishin Balance 1 | Koh Young vs. Total Soft Bank |
| Korea New vs. Hanshin Construction Co | Korea New vs. Netmarble Games Corp | Korea New vs. Seohee Construction Co | Korea New vs. Sungdo Engineering Construction |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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