Correlation Between KakaoBank Corp and System
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and System 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 System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and System and Application, you can compare the effects of market volatilities on KakaoBank Corp and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and System.
Diversification Opportunities for KakaoBank Corp and System
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between KakaoBank and System is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and System go up and down completely randomly.
Pair Corralation between KakaoBank Corp and System
Assuming the 90 days trading horizon KakaoBank Corp is expected to under-perform the System. But the stock apears to be less risky and, when comparing its historical volatility, KakaoBank Corp is 1.15 times less risky than System. The stock trades about -0.01 of its potential returns per unit of risk. The System and Application is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 208,904 in System and Application on October 17, 2024 and sell it today you would lose (44,904) from holding System and Application or give up 21.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
KakaoBank Corp vs. System and Application
Performance |
| Timeline |
| KakaoBank Corp |
| System and Application |
KakaoBank Corp and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and System
The main advantage of trading using opposite KakaoBank Corp and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| KakaoBank Corp vs. DAEDUCK ELECTRONICS CoLtd | KakaoBank Corp vs. Kyeryong Construction Industrial | KakaoBank Corp vs. ABCO Electronics Co | KakaoBank Corp vs. ENERGYMACHINERY KOREA CoLtd |
| System vs. Shinhan Inverse Copper | System vs. LB Investment | System vs. EBEST Investment Securities | System vs. DSC Investment |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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