Correlation Between Echomarketing CoLtd and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd 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 Echomarketing CoLtd and Korea Investment 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 Investment Holdings, you can compare the effects of market volatilities on Echomarketing CoLtd 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 Echomarketing CoLtd with a short position of Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echomarketing CoLtd and Korea Investment.
Diversification Opportunities for Echomarketing CoLtd and Korea Investment
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Echomarketing and Korea is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing CoLtd 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 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 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 Echomarketing CoLtd i.e., Echomarketing CoLtd and Korea Investment go up and down completely randomly.
Pair Corralation between Echomarketing CoLtd and Korea Investment
Assuming the 90 days trading horizon Echomarketing CoLtd is expected to under-perform the Korea Investment. In addition to that, Echomarketing CoLtd is 1.73 times more volatile than Korea Investment Holdings. It trades about -0.02 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.03 per unit of volatility. If you would invest 4,556,455 in Korea Investment Holdings on September 1, 2024 and sell it today you would earn a total of 853,545 from holding Korea Investment Holdings or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Echomarketing CoLtd vs. Korea Investment Holdings
Performance |
| Timeline |
| Echomarketing CoLtd |
| Korea Investment Holdings |
Echomarketing CoLtd and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echomarketing CoLtd and Korea Investment
The main advantage of trading using opposite Echomarketing CoLtd and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echomarketing CoLtd 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.| Echomarketing CoLtd vs. AfreecaTV Co | Echomarketing CoLtd vs. Seegene | Echomarketing CoLtd vs. SS TECH | Echomarketing CoLtd vs. Busan Industrial Co |
| Korea Investment vs. GS Retail Co | Korea Investment vs. Handok Clean Tech | Korea Investment vs. Samsung Life Insurance | Korea Investment vs. Clean Science 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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