Correlation Between Hurum and Korea Real
Can any of the company-specific risk be diversified away by investing in both Hurum 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 Hurum and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Korea Real Estate, you can compare the effects of market volatilities on Hurum 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 Hurum with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Korea Real.
Diversification Opportunities for Hurum and Korea Real
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hurum and Korea is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co 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 Hurum 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 Hurum Co 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 Hurum i.e., Hurum and Korea Real go up and down completely randomly.
Pair Corralation between Hurum and Korea Real
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Korea Real. In addition to that, Hurum is 3.96 times more volatile than Korea Real Estate. It trades about -0.16 of its total potential returns per unit of risk. Korea Real Estate is currently generating about -0.23 per unit of volatility. If you would invest 103,900 in Korea Real Estate on August 24, 2024 and sell it today you would lose (2,800) from holding Korea Real Estate or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Korea Real Estate
Performance |
| Timeline |
| Hurum |
| Korea Real Estate |
Hurum and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Korea Real
The main advantage of trading using opposite Hurum and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum 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.| Hurum vs. Iljin Materials Co | Hurum vs. Lotte Energy Materials | Hurum vs. Top Material Co | Hurum vs. National Plastic Co |
| Korea Real vs. DataSolution | Korea Real vs. Sungchang Autotech Co | Korea Real vs. System and Application | Korea Real vs. SCI Information Service |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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