Correlation Between Coloray International and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Coloray International 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 Coloray International and KyungIn Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and KyungIn Electronics Co, you can compare the effects of market volatilities on Coloray International 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 Coloray International with a short position of KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and KyungIn Electronics.
Diversification Opportunities for Coloray International and KyungIn Electronics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coloray and KyungIn is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics and Coloray International 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 Coloray International Investment 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 Coloray International i.e., Coloray International and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Coloray International and KyungIn Electronics
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 1.69 times more return on investment than KyungIn Electronics. However, Coloray International is 1.69 times more volatile than KyungIn Electronics Co. It trades about 0.49 of its potential returns per unit of risk. KyungIn Electronics Co is currently generating about -0.26 per unit of risk. If you would invest 56,900 in Coloray International Investment on October 14, 2024 and sell it today you would earn a total of 12,400 from holding Coloray International Investment or generate 21.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. KyungIn Electronics Co
Performance |
| Timeline |
| Coloray International |
| KyungIn Electronics |
Coloray International and KyungIn Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and KyungIn Electronics
The main advantage of trading using opposite Coloray International and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International 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.| Coloray International vs. Korea Information Engineering | Coloray International vs. Daou Data Corp | Coloray International vs. Samsung Publishing Co | Coloray International vs. Samlip General Foods |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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