Correlation Between Handok Clean and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Handok Clean and Koryo Credit 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 Handok Clean and Koryo Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Handok Clean Tech and Koryo Credit Information, you can compare the effects of market volatilities on Handok Clean and Koryo Credit 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 Handok Clean with a short position of Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Koryo Credit.
Diversification Opportunities for Handok Clean and Koryo Credit
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Handok and Koryo is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information and Handok Clean 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 Handok Clean Tech are associated (or correlated) with Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Handok Clean i.e., Handok Clean and Koryo Credit go up and down completely randomly.
Pair Corralation between Handok Clean and Koryo Credit
Assuming the 90 days trading horizon Handok Clean Tech is expected to under-perform the Koryo Credit. But the stock apears to be less risky and, when comparing its historical volatility, Handok Clean Tech is 1.59 times less risky than Koryo Credit. The stock trades about -0.37 of its potential returns per unit of risk. The Koryo Credit Information is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 989,000 in Koryo Credit Information on September 2, 2024 and sell it today you would earn a total of 42,000 from holding Koryo Credit Information or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Koryo Credit Information
Performance |
| Timeline |
| Handok Clean Tech |
| Koryo Credit Information |
Handok Clean and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Koryo Credit
The main advantage of trading using opposite Handok Clean and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean vs. Finebesteel |
| Koryo Credit vs. Lotte Energy Materials | Koryo Credit vs. Lotte Data Communication | Koryo Credit vs. Nable Communications | Koryo Credit vs. Hana Materials |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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