Correlation Between Imarketkorea and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both Imarketkorea and PLAYWITH 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 Imarketkorea and PLAYWITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imarketkorea and PLAYWITH, you can compare the effects of market volatilities on Imarketkorea and PLAYWITH 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 Imarketkorea with a short position of PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imarketkorea and PLAYWITH.
Diversification Opportunities for Imarketkorea and PLAYWITH
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Imarketkorea and PLAYWITH is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Imarketkorea and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH and Imarketkorea 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 Imarketkorea are associated (or correlated) with PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of Imarketkorea i.e., Imarketkorea and PLAYWITH go up and down completely randomly.
Pair Corralation between Imarketkorea and PLAYWITH
Assuming the 90 days trading horizon Imarketkorea is expected to generate 0.24 times more return on investment than PLAYWITH. However, Imarketkorea is 4.24 times less risky than PLAYWITH. It trades about -0.02 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.01 per unit of risk. If you would invest 873,274 in Imarketkorea on September 12, 2024 and sell it today you would lose (63,274) from holding Imarketkorea or give up 7.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Imarketkorea vs. PLAYWITH
Performance |
| Timeline |
| Imarketkorea |
| PLAYWITH |
Imarketkorea and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imarketkorea and PLAYWITH
The main advantage of trading using opposite Imarketkorea and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imarketkorea position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's long position.| Imarketkorea vs. DB Insurance Co | Imarketkorea vs. Dgb Financial | Imarketkorea vs. InfoBank | Imarketkorea vs. KB Financial Group |
| PLAYWITH vs. YG Entertainment | PLAYWITH vs. JYP Entertainment | PLAYWITH vs. Cube Entertainment | PLAYWITH vs. FNC Entertainment 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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