Correlation Between Kakao Games and Aprogen Healthcare
Can any of the company-specific risk be diversified away by investing in both Kakao Games and Aprogen Healthcare 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 Aprogen Healthcare 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 Aprogen Healthcare Games, you can compare the effects of market volatilities on Kakao Games and Aprogen Healthcare 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 Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and Aprogen Healthcare.
Diversification Opportunities for Kakao Games and Aprogen Healthcare
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kakao and Aprogen is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games 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 Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of Kakao Games i.e., Kakao Games and Aprogen Healthcare go up and down completely randomly.
Pair Corralation between Kakao Games and Aprogen Healthcare
Assuming the 90 days trading horizon Kakao Games Corp is expected to under-perform the Aprogen Healthcare. In addition to that, Kakao Games is 1.01 times more volatile than Aprogen Healthcare Games. It trades about -0.21 of its total potential returns per unit of risk. Aprogen Healthcare Games is currently generating about -0.02 per unit of volatility. If you would invest 51,000 in Aprogen Healthcare Games on October 25, 2024 and sell it today you would lose (600.00) from holding Aprogen Healthcare Games or give up 1.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Kakao Games Corp vs. Aprogen Healthcare Games
Performance |
| Timeline |
| Kakao Games Corp |
| Aprogen Healthcare Games |
Kakao Games and Aprogen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and Aprogen Healthcare
The main advantage of trading using opposite Kakao Games and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games position performs unexpectedly, Aprogen Healthcare 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 Aprogen Healthcare will offset losses from the drop in Aprogen Healthcare's long position.| Kakao Games vs. Busan Industrial Co | Kakao Games vs. Busan Ind | Kakao Games vs. RPBio Inc | Kakao Games vs. Finebesteel |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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