Correlation Between Apple and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Apple and Kyung Chang 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 Apple and Kyung Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Kyung Chang Industrial, you can compare the effects of market volatilities on Apple and Kyung Chang 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 Apple with a short position of Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Kyung Chang.
Diversification Opportunities for Apple and Kyung Chang
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Kyung is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Kyung Chang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung Chang Industrial and Apple 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 Apple Inc are associated (or correlated) with Kyung Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung Chang Industrial has no effect on the direction of Apple i.e., Apple and Kyung Chang go up and down completely randomly.
Pair Corralation between Apple and Kyung Chang
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Kyung Chang. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.37 times less risky than Kyung Chang. The stock trades about -0.08 of its potential returns per unit of risk. The Kyung Chang Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 193,000 in Kyung Chang Industrial on November 3, 2024 and sell it today you would earn a total of 6,100 from holding Kyung Chang Industrial or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Apple Inc vs. Kyung Chang Industrial
Performance |
| Timeline |
| Apple Inc |
| Kyung Chang Industrial |
Apple and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Kyung Chang
The main advantage of trading using opposite Apple and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Kyung Chang 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 Kyung Chang will offset losses from the drop in Kyung Chang's long position.The idea behind Apple Inc and Kyung Chang Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kyung Chang vs. Samlip General Foods | Kyung Chang vs. DONGKUK TED METAL | Kyung Chang vs. Samji Electronics Co | Kyung Chang vs. PJ Electronics Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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