Correlation Between Kakao Games and WooDeumGee Farm
Can any of the company-specific risk be diversified away by investing in both Kakao Games and WooDeumGee Farm 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 Kakao Games and WooDeumGee Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kakao Games Corp and WooDeumGee Farm Co,, you can compare the effects of market volatilities on Kakao Games and WooDeumGee Farm 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 Kakao Games with a short position of WooDeumGee Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and WooDeumGee Farm.
Diversification Opportunities for Kakao Games and WooDeumGee Farm
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kakao and WooDeumGee is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp and WooDeumGee Farm Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WooDeumGee Farm Co, and Kakao Games 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 Kakao Games Corp are associated (or correlated) with WooDeumGee Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WooDeumGee Farm Co, has no effect on the direction of Kakao Games i.e., Kakao Games and WooDeumGee Farm go up and down completely randomly.
Pair Corralation between Kakao Games and WooDeumGee Farm
Assuming the 90 days trading horizon Kakao Games Corp is expected to generate 1.73 times more return on investment than WooDeumGee Farm. However, Kakao Games is 1.73 times more volatile than WooDeumGee Farm Co,. It trades about 0.04 of its potential returns per unit of risk. WooDeumGee Farm Co, is currently generating about -0.09 per unit of risk. If you would invest 1,692,000 in Kakao Games Corp on August 29, 2024 and sell it today you would earn a total of 26,000 from holding Kakao Games Corp or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kakao Games Corp vs. WooDeumGee Farm Co,
Performance |
| Timeline |
| Kakao Games Corp |
| WooDeumGee Farm Co, |
Kakao Games and WooDeumGee Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and WooDeumGee Farm
The main advantage of trading using opposite Kakao Games and WooDeumGee Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games position performs unexpectedly, WooDeumGee Farm 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 WooDeumGee Farm will offset losses from the drop in WooDeumGee Farm's long position.| Kakao Games vs. Sungmoon Electronics Co | Kakao Games vs. Sunny Electronics Corp | Kakao Games vs. Cuckoo Electronics Co | Kakao Games vs. Jin Air Co |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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