Correlation Between Koh Young and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Koh Young and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on Koh Young and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and Kukil Metal.
Diversification Opportunities for Koh Young and Kukil Metal
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Koh and Kukil is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Koh Young i.e., Koh Young and Kukil Metal go up and down completely randomly.
Pair Corralation between Koh Young and Kukil Metal
Assuming the 90 days trading horizon Koh Young Technology is expected to generate 1.15 times more return on investment than Kukil Metal. However, Koh Young is 1.15 times more volatile than Kukil Metal Co. It trades about -0.02 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.06 per unit of risk. If you would invest 846,000 in Koh Young Technology on September 22, 2024 and sell it today you would lose (14,000) from holding Koh Young Technology or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. Kukil Metal Co
Performance |
| Timeline |
| Koh Young Technology |
| Kukil Metal |
Koh Young and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and Kukil Metal
The main advantage of trading using opposite Koh Young and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal'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 |
| Kukil Metal vs. Kbi Metal Co | Kukil Metal vs. Finebesteel | Kukil Metal vs. Daejung Chemicals Metals | Kukil Metal vs. Polaris Office Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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