Correlation Between KakaoBank Corp and Daol Investment
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and Daol Investment 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 Daol Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and Daol Investment Securities, you can compare the effects of market volatilities on KakaoBank Corp and Daol Investment 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 Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and Daol Investment.
Diversification Opportunities for KakaoBank Corp and Daol Investment
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KakaoBank and Daol is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and Daol Investment go up and down completely randomly.
Pair Corralation between KakaoBank Corp and Daol Investment
Assuming the 90 days trading horizon KakaoBank Corp is expected to under-perform the Daol Investment. But the stock apears to be less risky and, when comparing its historical volatility, KakaoBank Corp is 3.51 times less risky than Daol Investment. The stock trades about -0.32 of its potential returns per unit of risk. The Daol Investment Securities is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 312,000 in Daol Investment Securities on October 23, 2024 and sell it today you would lose (19,500) from holding Daol Investment Securities or give up 6.25% 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. Daol Investment Securities
Performance |
| Timeline |
| KakaoBank Corp |
| Daol Investment Secu |
KakaoBank Corp and Daol Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and Daol Investment
The main advantage of trading using opposite KakaoBank Corp and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, Daol Investment 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 Daol Investment will offset losses from the drop in Daol Investment'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 |
| Daol Investment vs. Leaders Technology Investment | Daol Investment vs. Inzi Display CoLtd | Daol Investment vs. TS Investment Corp | Daol Investment vs. Nable Communications |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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