Correlation Between IQuest and Bohae Brewery
Can any of the company-specific risk be diversified away by investing in both IQuest and Bohae Brewery 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 IQuest and Bohae Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and Bohae Brewery, you can compare the effects of market volatilities on IQuest and Bohae Brewery 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 IQuest with a short position of Bohae Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and Bohae Brewery.
Diversification Opportunities for IQuest and Bohae Brewery
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IQuest and Bohae is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and Bohae Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohae Brewery and IQuest 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 IQuest Co are associated (or correlated) with Bohae Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohae Brewery has no effect on the direction of IQuest i.e., IQuest and Bohae Brewery go up and down completely randomly.
Pair Corralation between IQuest and Bohae Brewery
Assuming the 90 days trading horizon IQuest Co is expected to generate 1.2 times more return on investment than Bohae Brewery. However, IQuest is 1.2 times more volatile than Bohae Brewery. It trades about -0.02 of its potential returns per unit of risk. Bohae Brewery is currently generating about -0.02 per unit of risk. If you would invest 343,185 in IQuest Co on September 2, 2024 and sell it today you would lose (105,685) from holding IQuest Co or give up 30.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. Bohae Brewery
Performance |
| Timeline |
| IQuest |
| Bohae Brewery |
IQuest and Bohae Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and Bohae Brewery
The main advantage of trading using opposite IQuest and Bohae Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, Bohae Brewery 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 Bohae Brewery will offset losses from the drop in Bohae Brewery's long position.| IQuest vs. Korea Steel Co | IQuest vs. Hankook Steel Co | IQuest vs. Wonil Special Steel | IQuest vs. Jeil Steel Mfg |
| Bohae Brewery vs. Korea Real Estate | Bohae Brewery vs. Korea Ratings Co | Bohae Brewery vs. IQuest Co | Bohae Brewery vs. Wonbang Tech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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