Correlation Between Alton Sports and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Kyeryong Construction 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 Alton Sports and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Kyeryong Construction Industrial, you can compare the effects of market volatilities on Alton Sports and Kyeryong Construction 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 Alton Sports with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Kyeryong Construction.
Diversification Opportunities for Alton Sports and Kyeryong Construction
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alton and Kyeryong is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Alton Sports i.e., Alton Sports and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Alton Sports and Kyeryong Construction
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 1.34 times more return on investment than Kyeryong Construction. However, Alton Sports is 1.34 times more volatile than Kyeryong Construction Industrial. It trades about -0.04 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.1 per unit of risk. If you would invest 162,200 in Alton Sports CoLtd on October 14, 2024 and sell it today you would lose (8,400) from holding Alton Sports CoLtd or give up 5.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Alton Sports CoLtd |
| Kyeryong Construction |
Alton Sports and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Kyeryong Construction
The main advantage of trading using opposite Alton Sports and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| Alton Sports vs. Green Cross Medical | Alton Sports vs. Haitai Confectionery Foods | Alton Sports vs. Sempio Foods Co | Alton Sports vs. Lotte Non Life Insurance |
| Kyeryong Construction vs. Alton Sports CoLtd | Kyeryong Construction vs. PLAYWITH | Kyeryong Construction vs. Korean Drug Co | Kyeryong Construction vs. Display Tech 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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