Correlation Between Kakao Games and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Kakao Games and UJU Electronics 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 UJU Electronics 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 UJU Electronics Co, you can compare the effects of market volatilities on Kakao Games and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and UJU Electronics.
Diversification Opportunities for Kakao Games and UJU Electronics
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kakao and UJU is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Kakao Games i.e., Kakao Games and UJU Electronics go up and down completely randomly.
Pair Corralation between Kakao Games and UJU Electronics
Assuming the 90 days trading horizon Kakao Games Corp is expected to under-perform the UJU Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Kakao Games Corp is 1.77 times less risky than UJU Electronics. The stock trades about -0.21 of its potential returns per unit of risk. The UJU Electronics Co is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 1,560,846 in UJU Electronics Co on October 25, 2024 and sell it today you would earn a total of 599,154 from holding UJU Electronics Co or generate 38.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kakao Games Corp vs. UJU Electronics Co
Performance |
| Timeline |
| Kakao Games Corp |
| UJU Electronics |
Kakao Games and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and UJU Electronics
The main advantage of trading using opposite Kakao Games and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| Kakao Games vs. Busan Industrial Co | Kakao Games vs. Busan Ind | Kakao Games vs. RPBio Inc | Kakao Games vs. Finebesteel |
| UJU Electronics vs. Hansol Homedeco Co | UJU Electronics vs. Korea Information Communications | UJU Electronics vs. Kakao Games Corp | UJU Electronics vs. Nice Information Telecommunication |
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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