Correlation Between Top Material and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Top Material and KyungIn Electronics 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 Top Material and KyungIn Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Material Co and KyungIn Electronics Co, you can compare the effects of market volatilities on Top Material and KyungIn Electronics 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 Top Material with a short position of KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Material and KyungIn Electronics.
Diversification Opportunities for Top Material and KyungIn Electronics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Top and KyungIn is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Top Material Co and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics and Top Material 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 Top Material Co are associated (or correlated) with KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Top Material i.e., Top Material and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Top Material and KyungIn Electronics
Assuming the 90 days trading horizon Top Material Co is expected to generate 1.5 times more return on investment than KyungIn Electronics. However, Top Material is 1.5 times more volatile than KyungIn Electronics Co. It trades about 0.02 of its potential returns per unit of risk. KyungIn Electronics Co is currently generating about 0.0 per unit of risk. If you would invest 3,178,559 in Top Material Co on August 31, 2024 and sell it today you would lose (158,559) from holding Top Material Co or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Material Co vs. KyungIn Electronics Co
Performance |
| Timeline |
| Top Material |
| KyungIn Electronics |
Top Material and KyungIn Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Material and KyungIn Electronics
The main advantage of trading using opposite Top Material and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Material position performs unexpectedly, KyungIn Electronics 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 KyungIn Electronics will offset losses from the drop in KyungIn Electronics' long position.| Top Material vs. Barunson Entertainment Arts | Top Material vs. SM Entertainment Co | Top Material vs. JYP Entertainment Corp | Top Material vs. Histeel |
| KyungIn Electronics vs. AptaBio Therapeutics | KyungIn Electronics vs. Daewoo SBI SPAC | KyungIn Electronics vs. Dream Security co | KyungIn Electronics vs. Microfriend |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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