Correlation Between Echomarketing CoLtd and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd and Korea Alcohol 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 Echomarketing CoLtd and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echomarketing CoLtd and Korea Alcohol Industrial, you can compare the effects of market volatilities on Echomarketing CoLtd and Korea Alcohol 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 Echomarketing CoLtd with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echomarketing CoLtd and Korea Alcohol.
Diversification Opportunities for Echomarketing CoLtd and Korea Alcohol
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Echomarketing and Korea is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing CoLtd and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and Echomarketing CoLtd 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 Echomarketing CoLtd are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Echomarketing CoLtd i.e., Echomarketing CoLtd and Korea Alcohol go up and down completely randomly.
Pair Corralation between Echomarketing CoLtd and Korea Alcohol
Assuming the 90 days trading horizon Echomarketing CoLtd is expected to under-perform the Korea Alcohol. In addition to that, Echomarketing CoLtd is 3.27 times more volatile than Korea Alcohol Industrial. It trades about -0.08 of its total potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.17 per unit of volatility. If you would invest 906,000 in Korea Alcohol Industrial on September 1, 2024 and sell it today you would lose (47,000) from holding Korea Alcohol Industrial or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echomarketing CoLtd vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Echomarketing CoLtd |
| Korea Alcohol Industrial |
Echomarketing CoLtd and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echomarketing CoLtd and Korea Alcohol
The main advantage of trading using opposite Echomarketing CoLtd and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echomarketing CoLtd position performs unexpectedly, Korea Alcohol 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 Alcohol will offset losses from the drop in Korea Alcohol's long position.| Echomarketing CoLtd vs. AfreecaTV Co | Echomarketing CoLtd vs. Seegene | Echomarketing CoLtd vs. SS TECH | Echomarketing CoLtd vs. Busan Industrial Co |
| Korea Alcohol vs. Golden Bridge Investment | Korea Alcohol vs. Daol Investment Securities | Korea Alcohol vs. LG Chemicals | Korea Alcohol vs. Nh Investment And |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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