Correlation Between Capital Income and Kyung Chang
Can any of the company-specific risk be diversified away by investing in both Capital Income 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 Capital Income and Kyung Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Kyung Chang Industrial, you can compare the effects of market volatilities on Capital Income 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 Capital Income with a short position of Kyung Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Kyung Chang.
Diversification Opportunities for Capital Income and Kyung Chang
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capital and Kyung is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder 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 Capital Income 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 Capital Income Builder 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 Capital Income i.e., Capital Income and Kyung Chang go up and down completely randomly.
Pair Corralation between Capital Income and Kyung Chang
Assuming the 90 days horizon Capital Income Builder is expected to under-perform the Kyung Chang. But the mutual fund apears to be less risky and, when comparing its historical volatility, Capital Income Builder is 3.18 times less risky than Kyung Chang. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Kyung Chang Industrial is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 193,192 in Kyung Chang Industrial on November 3, 2024 and sell it today you would earn a total of 5,908 from holding Kyung Chang Industrial or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.24% |
| Values | Daily Returns |
Capital Income Builder vs. Kyung Chang Industrial
Performance |
| Timeline |
| Capital Income Builder |
| Kyung Chang Industrial |
Capital Income and Kyung Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Kyung Chang
The main advantage of trading using opposite Capital Income and Kyung Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income 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.| Capital Income vs. Dws Global Macro | Capital Income vs. Rbb Fund | Capital Income vs. Kinetics Global Fund | Capital Income vs. Ms Global Fixed |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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