Correlation Between Cosmecca Korea and Raontech
Can any of the company-specific risk be diversified away by investing in both Cosmecca Korea and Raontech 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 Cosmecca Korea and Raontech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosmecca Korea Co and Raontech, you can compare the effects of market volatilities on Cosmecca Korea and Raontech 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 Cosmecca Korea with a short position of Raontech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmecca Korea and Raontech.
Diversification Opportunities for Cosmecca Korea and Raontech
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cosmecca and Raontech is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cosmecca Korea Co and Raontech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raontech and Cosmecca Korea 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 Cosmecca Korea Co are associated (or correlated) with Raontech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raontech has no effect on the direction of Cosmecca Korea i.e., Cosmecca Korea and Raontech go up and down completely randomly.
Pair Corralation between Cosmecca Korea and Raontech
Assuming the 90 days trading horizon Cosmecca Korea Co is expected to under-perform the Raontech. In addition to that, Cosmecca Korea is 1.05 times more volatile than Raontech. It trades about -0.33 of its total potential returns per unit of risk. Raontech is currently generating about -0.16 per unit of volatility. If you would invest 300,000 in Raontech on September 12, 2024 and sell it today you would lose (41,000) from holding Raontech or give up 13.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cosmecca Korea Co vs. Raontech
Performance |
| Timeline |
| Cosmecca Korea |
| Raontech |
Cosmecca Korea and Raontech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmecca Korea and Raontech
The main advantage of trading using opposite Cosmecca Korea and Raontech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmecca Korea position performs unexpectedly, Raontech 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 Raontech will offset losses from the drop in Raontech's long position.| Cosmecca Korea vs. Samsung Electronics Co | Cosmecca Korea vs. Derkwoo Electronics Co | Cosmecca Korea vs. Shinsegae Information Communication | Cosmecca Korea vs. Daishin Information Communications |
| Raontech vs. Samsung Electronics Co | Raontech vs. Samsung Electronics Co | Raontech vs. LG Energy Solution | Raontech vs. SK Hynix |
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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