Correlation Between Cheryong Industrial and Kia Corp
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and Kia Corp 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 Cheryong Industrial and Kia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheryong Industrial CoLtd and Kia Corp, you can compare the effects of market volatilities on Cheryong Industrial and Kia Corp 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 Cheryong Industrial with a short position of Kia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and Kia Corp.
Diversification Opportunities for Cheryong Industrial and Kia Corp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheryong and Kia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and Kia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kia Corp and Cheryong Industrial 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 Cheryong Industrial CoLtd are associated (or correlated) with Kia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kia Corp has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and Kia Corp go up and down completely randomly.
Pair Corralation between Cheryong Industrial and Kia Corp
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to under-perform the Kia Corp. In addition to that, Cheryong Industrial is 1.53 times more volatile than Kia Corp. It trades about -0.1 of its total potential returns per unit of risk. Kia Corp is currently generating about 0.02 per unit of volatility. If you would invest 9,370,000 in Kia Corp on August 30, 2024 and sell it today you would earn a total of 60,000 from holding Kia Corp or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. Kia Corp
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| Kia Corp |
Cheryong Industrial and Kia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and Kia Corp
The main advantage of trading using opposite Cheryong Industrial and Kia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, Kia Corp 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 Kia Corp will offset losses from the drop in Kia Corp's long position.| Cheryong Industrial vs. Lion Chemtech Co | Cheryong Industrial vs. Kuk Young GM | Cheryong Industrial vs. Nature and Environment | Cheryong Industrial vs. IL Science Co |
| Kia Corp vs. KMH Hitech Co | Kia Corp vs. GemVaxKAEL CoLtd | Kia Corp vs. Busan Industrial Co | Kia Corp vs. Busan Ind |
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.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |