Correlation Between TOPMATERIAL and Korea Real
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL 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 TOPMATERIAL and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and Korea Real Estate, you can compare the effects of market volatilities on TOPMATERIAL 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 TOPMATERIAL with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and Korea Real.
Diversification Opportunities for TOPMATERIAL and Korea Real
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOPMATERIAL and Korea is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD 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 TOPMATERIAL 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 TOPMATERIAL LTD 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 TOPMATERIAL i.e., TOPMATERIAL and Korea Real go up and down completely randomly.
Pair Corralation between TOPMATERIAL and Korea Real
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to generate 3.19 times more return on investment than Korea Real. However, TOPMATERIAL is 3.19 times more volatile than Korea Real Estate. It trades about 0.04 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.21 per unit of risk. If you would invest 2,705,000 in TOPMATERIAL LTD on October 25, 2024 and sell it today you would earn a total of 40,000 from holding TOPMATERIAL LTD or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPMATERIAL LTD vs. Korea Real Estate
Performance |
| Timeline |
| TOPMATERIAL LTD |
| Korea Real Estate |
TOPMATERIAL and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPMATERIAL and Korea Real
The main advantage of trading using opposite TOPMATERIAL and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL 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.| TOPMATERIAL vs. Nice Information Telecommunication | TOPMATERIAL vs. Iljin Display | TOPMATERIAL vs. Daishin Information Communications | TOPMATERIAL vs. Sewoon Medical Co |
| Korea Real vs. SungMoon Electronics Co | Korea Real vs. Hyundai Home Shopping | Korea Real vs. Hankook Furniture Co | Korea Real vs. Lotte Chilsung Beverage |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |