Correlation Between KakaoBank Corp and ECSTELECOM
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and ECSTELECOM 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 ECSTELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and ECSTELECOM Co, you can compare the effects of market volatilities on KakaoBank Corp and ECSTELECOM 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 ECSTELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and ECSTELECOM.
Diversification Opportunities for KakaoBank Corp and ECSTELECOM
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between KakaoBank and ECSTELECOM is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and ECSTELECOM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECSTELECOM 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 ECSTELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECSTELECOM has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and ECSTELECOM go up and down completely randomly.
Pair Corralation between KakaoBank Corp and ECSTELECOM
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 0.99 times more return on investment than ECSTELECOM. However, KakaoBank Corp is 1.01 times less risky than ECSTELECOM. It trades about 0.38 of its potential returns per unit of risk. ECSTELECOM Co is currently generating about 0.12 per unit of risk. If you would invest 2,120,000 in KakaoBank Corp on November 27, 2024 and sell it today you would earn a total of 290,000 from holding KakaoBank Corp or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. ECSTELECOM Co
Performance |
| Timeline |
| KakaoBank Corp |
| ECSTELECOM |
KakaoBank Corp and ECSTELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and ECSTELECOM
The main advantage of trading using opposite KakaoBank Corp and ECSTELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, ECSTELECOM 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 ECSTELECOM will offset losses from the drop in ECSTELECOM's long position.| KakaoBank Corp vs. Pan Entertainment Co | KakaoBank Corp vs. JYP Entertainment Corp | KakaoBank Corp vs. Hanjin Transportation Co | KakaoBank Corp vs. Digital Power Communications |
| ECSTELECOM vs. CU Tech Corp | ECSTELECOM vs. NewFlex Technology Co | ECSTELECOM vs. Orbitech Co | ECSTELECOM vs. Taegu Broadcasting |
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 Stocks Directory module to find actively traded stocks across global markets.
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