Correlation Between Koh Young and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both Koh Young and Puloon Technology 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 Puloon Technology 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 Puloon Technology, you can compare the effects of market volatilities on Koh Young and Puloon Technology 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and Puloon Technology.
Diversification Opportunities for Koh Young and Puloon Technology
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Koh and Puloon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon Technology 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of Koh Young i.e., Koh Young and Puloon Technology go up and down completely randomly.
Pair Corralation between Koh Young and Puloon Technology
Assuming the 90 days trading horizon Koh Young is expected to generate 13.04 times less return on investment than Puloon Technology. But when comparing it to its historical volatility, Koh Young Technology is 2.53 times less risky than Puloon Technology. It trades about 0.03 of its potential returns per unit of risk. Puloon Technology is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 601,000 in Puloon Technology on September 20, 2024 and sell it today you would earn a total of 107,000 from holding Puloon Technology or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. Puloon Technology
Performance |
| Timeline |
| Koh Young Technology |
| Puloon Technology |
Koh Young and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and Puloon Technology
The main advantage of trading using opposite Koh Young and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, Puloon Technology 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 Puloon Technology will offset losses from the drop in Puloon Technology's long position.The idea behind Koh Young Technology and Puloon Technology 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.| Puloon Technology vs. Yura Tech Co | Puloon Technology vs. Hannong Chemicals | Puloon Technology vs. SK Chemicals Co | Puloon Technology vs. Cots Technology 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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