Correlation Between Hurum and Koh Young
Can any of the company-specific risk be diversified away by investing in both Hurum and Koh Young 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 Koh Young into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Koh Young Technology, you can compare the effects of market volatilities on Hurum and Koh Young 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 Koh Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Koh Young.
Diversification Opportunities for Hurum and Koh Young
Poor diversification
The 3 months correlation between Hurum and Koh is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Koh Young Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koh Young Technology 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 Koh Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koh Young Technology has no effect on the direction of Hurum i.e., Hurum and Koh Young go up and down completely randomly.
Pair Corralation between Hurum and Koh Young
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Koh Young. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 1.36 times less risky than Koh Young. The stock trades about -0.03 of its potential returns per unit of risk. The Koh Young Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,374,747 in Koh Young Technology on September 2, 2024 and sell it today you would lose (552,747) from holding Koh Young Technology or give up 40.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Koh Young Technology
Performance |
| Timeline |
| Hurum |
| Koh Young Technology |
Hurum and Koh Young Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Koh Young
The main advantage of trading using opposite Hurum and Koh Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Koh Young 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 Koh Young will offset losses from the drop in Koh Young's long position.| Hurum vs. Samsung Electronics Co | Hurum vs. Samsung Electronics Co | Hurum vs. LG Energy Solution | Hurum vs. SK Hynix |
| Koh Young vs. Dongsin Engineering Construction | Koh Young vs. Doosan Fuel Cell | Koh Young vs. Daishin Balance 1 | Koh Young vs. Total Soft Bank |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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