Correlation Between KakaoBank Corp and Bookook Steel
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and Bookook Steel 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 KakaoBank Corp and Bookook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and Bookook Steel, you can compare the effects of market volatilities on KakaoBank Corp and Bookook Steel 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 KakaoBank Corp with a short position of Bookook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and Bookook Steel.
Diversification Opportunities for KakaoBank Corp and Bookook Steel
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between KakaoBank and Bookook is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and Bookook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bookook Steel and KakaoBank Corp 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 KakaoBank Corp are associated (or correlated) with Bookook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bookook Steel has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and Bookook Steel go up and down completely randomly.
Pair Corralation between KakaoBank Corp and Bookook Steel
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 0.94 times more return on investment than Bookook Steel. However, KakaoBank Corp is 1.07 times less risky than Bookook Steel. It trades about 0.01 of its potential returns per unit of risk. Bookook Steel is currently generating about 0.0 per unit of risk. If you would invest 2,410,000 in KakaoBank Corp on September 24, 2024 and sell it today you would lose (200,000) from holding KakaoBank Corp or give up 8.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. Bookook Steel
Performance |
| Timeline |
| KakaoBank Corp |
| Bookook Steel |
KakaoBank Corp and Bookook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and Bookook Steel
The main advantage of trading using opposite KakaoBank Corp and Bookook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, Bookook Steel 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 Bookook Steel will offset losses from the drop in Bookook Steel's long position.| KakaoBank Corp vs. Shinhan Financial Group | KakaoBank Corp vs. Hana Financial | KakaoBank Corp vs. Woori Financial Group | KakaoBank Corp vs. Industrial Bank |
| Bookook Steel vs. Pureun Mutual Savings | Bookook Steel vs. Wonil Special Steel | Bookook Steel vs. KakaoBank Corp | Bookook Steel vs. Jeil Steel Mfg |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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