Correlation Between KBSTAR 200TR and Korea New
Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR and Korea New 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 KBSTAR 200TR and Korea New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR 200TR and Korea New Network, you can compare the effects of market volatilities on KBSTAR 200TR and Korea New 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 KBSTAR 200TR with a short position of Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and Korea New.
Diversification Opportunities for KBSTAR 200TR and Korea New
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KBSTAR and Korea is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network and KBSTAR 200TR 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 KBSTAR 200TR are associated (or correlated) with Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of KBSTAR 200TR i.e., KBSTAR 200TR and Korea New go up and down completely randomly.
Pair Corralation between KBSTAR 200TR and Korea New
Assuming the 90 days trading horizon KBSTAR 200TR is expected to generate 0.54 times more return on investment than Korea New. However, KBSTAR 200TR is 1.85 times less risky than Korea New. It trades about 0.03 of its potential returns per unit of risk. Korea New Network is currently generating about 0.0 per unit of risk. If you would invest 1,640,500 in KBSTAR 200TR on August 27, 2024 and sell it today you would earn a total of 198,000 from holding KBSTAR 200TR or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBSTAR 200TR vs. Korea New Network
Performance |
| Timeline |
| KBSTAR 200TR |
| Korea New Network |
KBSTAR 200TR and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR 200TR and Korea New
The main advantage of trading using opposite KBSTAR 200TR and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR position performs unexpectedly, Korea New 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 New will offset losses from the drop in Korea New's long position.| KBSTAR 200TR vs. Busan Industrial Co | KBSTAR 200TR vs. Busan Ind | KBSTAR 200TR vs. Mirae Asset Daewoo | KBSTAR 200TR vs. Shinhan WTI Futures |
| Korea New vs. Samsung Electronics Co | Korea New vs. Samsung Electronics Co | Korea New vs. LG Energy Solution | Korea New vs. SK Hynix |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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