Correlation Between Kolon Life and Chin Yang
Can any of the company-specific risk be diversified away by investing in both Kolon Life and Chin Yang 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 Kolon Life and Chin Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Life Science and Chin Yang Chemical, you can compare the effects of market volatilities on Kolon Life and Chin Yang 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 Kolon Life with a short position of Chin Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Life and Chin Yang.
Diversification Opportunities for Kolon Life and Chin Yang
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kolon and Chin is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Life Science and Chin Yang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Yang Chemical and Kolon Life 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 Kolon Life Science are associated (or correlated) with Chin Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Yang Chemical has no effect on the direction of Kolon Life i.e., Kolon Life and Chin Yang go up and down completely randomly.
Pair Corralation between Kolon Life and Chin Yang
Assuming the 90 days trading horizon Kolon Life Science is expected to generate 0.56 times more return on investment than Chin Yang. However, Kolon Life Science is 1.79 times less risky than Chin Yang. It trades about 0.07 of its potential returns per unit of risk. Chin Yang Chemical is currently generating about -0.19 per unit of risk. If you would invest 1,904,000 in Kolon Life Science on September 5, 2024 and sell it today you would earn a total of 56,000 from holding Kolon Life Science or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Life Science vs. Chin Yang Chemical
Performance |
| Timeline |
| Kolon Life Science |
| Chin Yang Chemical |
Kolon Life and Chin Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Life and Chin Yang
The main advantage of trading using opposite Kolon Life and Chin Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Life position performs unexpectedly, Chin Yang 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 Chin Yang will offset losses from the drop in Chin Yang's long position.| Kolon Life vs. Chin Yang Chemical | Kolon Life vs. Raontech | Kolon Life vs. Orbitech Co | Kolon Life vs. Tae Kyung Chemical |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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