Correlation Between KakaoBank Corp and TS Investment
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and TS 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 TS 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 TS Investment Corp, you can compare the effects of market volatilities on KakaoBank Corp and TS 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 TS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and TS Investment.
Diversification Opportunities for KakaoBank Corp and TS Investment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KakaoBank and 246690 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and TS Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TS Investment Corp 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 TS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TS Investment Corp has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and TS Investment go up and down completely randomly.
Pair Corralation between KakaoBank Corp and TS Investment
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 0.96 times more return on investment than TS Investment. However, KakaoBank Corp is 1.05 times less risky than TS Investment. It trades about 0.09 of its potential returns per unit of risk. TS Investment Corp is currently generating about -0.32 per unit of risk. If you would invest 2,255,000 in KakaoBank Corp on September 4, 2024 and sell it today you would earn a total of 80,000 from holding KakaoBank Corp or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. TS Investment Corp
Performance |
| Timeline |
| KakaoBank Corp |
| TS Investment Corp |
KakaoBank Corp and TS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and TS Investment
The main advantage of trading using opposite KakaoBank Corp and TS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, TS 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 TS Investment will offset losses from the drop in TS 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 |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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