Correlation Between KBSTAR 200TR and DYPNF CoLtd
Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR and DYPNF CoLtd 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 DYPNF CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR 200TR and DYPNF CoLtd, you can compare the effects of market volatilities on KBSTAR 200TR and DYPNF CoLtd 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 DYPNF CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and DYPNF CoLtd.
Diversification Opportunities for KBSTAR 200TR and DYPNF CoLtd
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KBSTAR and DYPNF is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and DYPNF CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DYPNF CoLtd 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 DYPNF CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DYPNF CoLtd has no effect on the direction of KBSTAR 200TR i.e., KBSTAR 200TR and DYPNF CoLtd go up and down completely randomly.
Pair Corralation between KBSTAR 200TR and DYPNF CoLtd
Assuming the 90 days trading horizon KBSTAR 200TR is expected to generate 0.34 times more return on investment than DYPNF CoLtd. However, KBSTAR 200TR is 2.92 times less risky than DYPNF CoLtd. It trades about 0.03 of its potential returns per unit of risk. DYPNF CoLtd is currently generating about -0.07 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBSTAR 200TR vs. DYPNF CoLtd
Performance |
| Timeline |
| KBSTAR 200TR |
| DYPNF CoLtd |
KBSTAR 200TR and DYPNF CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR 200TR and DYPNF CoLtd
The main advantage of trading using opposite KBSTAR 200TR and DYPNF CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR position performs unexpectedly, DYPNF CoLtd 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 DYPNF CoLtd will offset losses from the drop in DYPNF CoLtd'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 |
| DYPNF CoLtd vs. Samsung Electronics Co | DYPNF CoLtd vs. Samsung Electronics Co | DYPNF CoLtd vs. LG Energy Solution | DYPNF CoLtd 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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