Correlation Between Cots Technology and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Cots Technology and Korea Alcohol 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 Cots Technology and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cots Technology Co and Korea Alcohol Industrial, you can compare the effects of market volatilities on Cots Technology and Korea Alcohol 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 Cots Technology with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cots Technology and Korea Alcohol.
Diversification Opportunities for Cots Technology and Korea Alcohol
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cots and Korea is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cots Technology Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and Cots Technology 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 Cots Technology Co are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Cots Technology i.e., Cots Technology and Korea Alcohol go up and down completely randomly.
Pair Corralation between Cots Technology and Korea Alcohol
Assuming the 90 days trading horizon Cots Technology Co is expected to under-perform the Korea Alcohol. In addition to that, Cots Technology is 3.04 times more volatile than Korea Alcohol Industrial. It trades about -0.04 of its total potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.1 per unit of volatility. If you would invest 1,059,000 in Korea Alcohol Industrial on September 3, 2024 and sell it today you would lose (200,000) from holding Korea Alcohol Industrial or give up 18.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cots Technology Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Cots Technology |
| Korea Alcohol Industrial |
Cots Technology and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cots Technology and Korea Alcohol
The main advantage of trading using opposite Cots Technology and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cots Technology position performs unexpectedly, Korea Alcohol 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 Alcohol will offset losses from the drop in Korea Alcohol's long position.| Cots Technology vs. Samsung Electronics Co | Cots Technology vs. Samsung Electronics Co | Cots Technology vs. LG Energy Solution | Cots Technology vs. SK Hynix |
| Korea Alcohol vs. KMH Hitech Co | Korea Alcohol vs. Songwon Industrial Co | Korea Alcohol vs. Cots Technology Co | Korea Alcohol vs. Korea Shipbuilding Offshore |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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