Correlation Between Withuspharmaceutical and Kolon Life
Can any of the company-specific risk be diversified away by investing in both Withuspharmaceutical and Kolon Life 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 Withuspharmaceutical and Kolon Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Withuspharmaceutical CoLtd and Kolon Life Science, you can compare the effects of market volatilities on Withuspharmaceutical and Kolon Life 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 Withuspharmaceutical with a short position of Kolon Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Withuspharmaceutical and Kolon Life.
Diversification Opportunities for Withuspharmaceutical and Kolon Life
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Withuspharmaceutical and Kolon is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Withuspharmaceutical CoLtd and Kolon Life Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Life Science and Withuspharmaceutical 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 Withuspharmaceutical CoLtd are associated (or correlated) with Kolon Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Life Science has no effect on the direction of Withuspharmaceutical i.e., Withuspharmaceutical and Kolon Life go up and down completely randomly.
Pair Corralation between Withuspharmaceutical and Kolon Life
Assuming the 90 days trading horizon Withuspharmaceutical CoLtd is expected to under-perform the Kolon Life. In addition to that, Withuspharmaceutical is 1.47 times more volatile than Kolon Life Science. It trades about -0.1 of its total potential returns per unit of risk. Kolon Life Science is currently generating about -0.13 per unit of volatility. If you would invest 1,884,000 in Kolon Life Science on August 27, 2024 and sell it today you would lose (84,000) from holding Kolon Life Science or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Withuspharmaceutical CoLtd vs. Kolon Life Science
Performance |
| Timeline |
| Withuspharmaceutical |
| Kolon Life Science |
Withuspharmaceutical and Kolon Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Withuspharmaceutical and Kolon Life
The main advantage of trading using opposite Withuspharmaceutical and Kolon Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Withuspharmaceutical position performs unexpectedly, Kolon Life 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 Kolon Life will offset losses from the drop in Kolon Life's long position.| Withuspharmaceutical vs. Kolon Life Science | Withuspharmaceutical vs. Aminologics CoLtd | Withuspharmaceutical vs. High Tech Pharm |
| Kolon Life vs. Aminologics CoLtd | Kolon Life vs. Withuspharmaceutical CoLtd | Kolon Life vs. High Tech Pharm |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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