Correlation Between Microfriend and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Microfriend and Korea Investment 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 Microfriend and Korea Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Korea Investment Holdings, you can compare the effects of market volatilities on Microfriend and Korea Investment 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 Microfriend with a short position of Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Korea Investment.
Diversification Opportunities for Microfriend and Korea Investment
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Microfriend and Korea is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings and Microfriend 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 Microfriend are associated (or correlated) with Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Microfriend i.e., Microfriend and Korea Investment go up and down completely randomly.
Pair Corralation between Microfriend and Korea Investment
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Korea Investment. In addition to that, Microfriend is 2.61 times more volatile than Korea Investment Holdings. It trades about -0.01 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.04 per unit of volatility. If you would invest 4,311,155 in Korea Investment Holdings on August 28, 2024 and sell it today you would earn a total of 988,845 from holding Korea Investment Holdings or generate 22.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Korea Investment Holdings
Performance |
| Timeline |
| Microfriend |
| Korea Investment Holdings |
Microfriend and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Korea Investment
The main advantage of trading using opposite Microfriend and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment's long position.| Microfriend vs. SK Hynix | Microfriend vs. People Technology | Microfriend vs. SIMMTECH Co | Microfriend vs. Haesung DS Co |
| Korea Investment vs. Samji Electronics Co | Korea Investment vs. Sunny Electronics Corp | Korea Investment vs. Genie Music | Korea Investment vs. Alton Sports CoLtd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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