Correlation Between Wireless Power and Korea Real
Can any of the company-specific risk be diversified away by investing in both Wireless Power and Korea Real 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 Wireless Power and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wireless Power Amplifier and Korea Real Estate, you can compare the effects of market volatilities on Wireless Power and Korea Real 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 Wireless Power with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wireless Power and Korea Real.
Diversification Opportunities for Wireless Power and Korea Real
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wireless and Korea is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Power Amplifier and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate and Wireless Power 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 Wireless Power Amplifier are associated (or correlated) with Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Wireless Power i.e., Wireless Power and Korea Real go up and down completely randomly.
Pair Corralation between Wireless Power and Korea Real
Assuming the 90 days trading horizon Wireless Power Amplifier is expected to generate 3.2 times more return on investment than Korea Real. However, Wireless Power is 3.2 times more volatile than Korea Real Estate. It trades about -0.01 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.04 per unit of risk. If you would invest 326,000 in Wireless Power Amplifier on September 3, 2024 and sell it today you would lose (103,000) from holding Wireless Power Amplifier or give up 31.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wireless Power Amplifier vs. Korea Real Estate
Performance |
| Timeline |
| Wireless Power Amplifier |
| Korea Real Estate |
Wireless Power and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wireless Power and Korea Real
The main advantage of trading using opposite Wireless Power and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wireless Power position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Wireless Power vs. Daejoo Electronic Materials | Wireless Power vs. Parksystems Corp | Wireless Power vs. BH Co | Wireless Power vs. Partron Co |
| Korea Real vs. Sejong Telecom | Korea Real vs. Mobileleader CoLtd | Korea Real vs. Lotte Data Communication | Korea Real vs. Wireless Power Amplifier |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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