Correlation Between SV Investment and Korean Drug
Can any of the company-specific risk be diversified away by investing in both SV Investment and Korean Drug 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 SV Investment and Korean Drug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SV Investment and Korean Drug Co, you can compare the effects of market volatilities on SV Investment and Korean Drug 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 SV Investment with a short position of Korean Drug. Check out your portfolio center. Please also check ongoing floating volatility patterns of SV Investment and Korean Drug.
Diversification Opportunities for SV Investment and Korean Drug
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 289080 and Korean is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SV Investment and Korean Drug Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Drug and SV Investment 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 SV Investment are associated (or correlated) with Korean Drug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Drug has no effect on the direction of SV Investment i.e., SV Investment and Korean Drug go up and down completely randomly.
Pair Corralation between SV Investment and Korean Drug
Assuming the 90 days trading horizon SV Investment is expected to under-perform the Korean Drug. In addition to that, SV Investment is 1.41 times more volatile than Korean Drug Co. It trades about -0.04 of its total potential returns per unit of risk. Korean Drug Co is currently generating about -0.03 per unit of volatility. If you would invest 719,275 in Korean Drug Co on November 2, 2024 and sell it today you would lose (240,775) from holding Korean Drug Co or give up 33.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SV Investment vs. Korean Drug Co
Performance |
| Timeline |
| SV Investment |
| Korean Drug |
SV Investment and Korean Drug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SV Investment and Korean Drug
The main advantage of trading using opposite SV Investment and Korean Drug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SV Investment position performs unexpectedly, Korean Drug 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 Korean Drug will offset losses from the drop in Korean Drug's long position.| SV Investment vs. Nice Information Telecommunication | SV Investment vs. Atinum Investment Co | SV Investment vs. Sangsangin Investment Securities | SV Investment vs. DB Financial Investment |
| Korean Drug vs. Jeong Moon Information | Korean Drug vs. SK Chemicals Co | Korean Drug vs. Daishin Information Communications | Korean Drug vs. Sewoon Medical 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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