Correlation Between Cheryong Industrial and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and Kyung Chang 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 Kyung Chang 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 Kyung Chang Industrial, you can compare the effects of market volatilities on Cheryong Industrial and Kyung Chang 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 Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and Kyung Chang.
Diversification Opportunities for Cheryong Industrial and Kyung Chang
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cheryong and Kyung is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial 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 Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and Kyung Chang go up and down completely randomly.
Pair Corralation between Cheryong Industrial and Kyung Chang
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to generate 1.5 times more return on investment than Kyung Chang. However, Cheryong Industrial is 1.5 times more volatile than Kyung Chang Industrial. It trades about 0.08 of its potential returns per unit of risk. Kyung Chang Industrial is currently generating about 0.0 per unit of risk. If you would invest 329,601 in Cheryong Industrial CoLtd on November 3, 2024 and sell it today you would earn a total of 339,399 from holding Cheryong Industrial CoLtd or generate 102.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. Kyung Chang Industrial
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| Kyung Chang Industrial |
Cheryong Industrial and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and Kyung Chang
The main advantage of trading using opposite Cheryong Industrial and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's long position.| Cheryong Industrial vs. Kukdong Oil Chemicals | Cheryong Industrial vs. LG Household Healthcare | Cheryong Industrial vs. INSUN Environmental New | Cheryong Industrial vs. Husteel |
| Kyung Chang vs. Samlip General Foods | Kyung Chang vs. DONGKUK TED METAL | Kyung Chang vs. Samji Electronics Co | Kyung Chang vs. PJ Electronics 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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