Correlation Between Dow Jones and Kuk Young
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Kuk Young 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 Dow Jones and Kuk Young into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Kuk Young GM, you can compare the effects of market volatilities on Dow Jones and Kuk Young 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 Dow Jones with a short position of Kuk Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Kuk Young.
Diversification Opportunities for Dow Jones and Kuk Young
Very weak diversification
The 3 months correlation between Dow and Kuk is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Kuk Young GM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuk Young GM and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Kuk Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuk Young GM has no effect on the direction of Dow Jones i.e., Dow Jones and Kuk Young go up and down completely randomly.
Pair Corralation between Dow Jones and Kuk Young
Assuming the 90 days trading horizon Dow Jones is expected to generate 5.13 times less return on investment than Kuk Young. But when comparing it to its historical volatility, Dow Jones Industrial is 7.76 times less risky than Kuk Young. It trades about 0.21 of its potential returns per unit of risk. Kuk Young GM is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 187,400 in Kuk Young GM on August 25, 2024 and sell it today you would earn a total of 36,100 from holding Kuk Young GM or generate 19.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Kuk Young GM
Performance |
| Timeline |
Dow Jones and Kuk Young Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Kuk Young GM
Pair trading matchups for Kuk Young
Pair Trading with Dow Jones and Kuk Young
The main advantage of trading using opposite Dow Jones and Kuk Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Kuk Young 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 Kuk Young will offset losses from the drop in Kuk Young's long position.| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
| Kuk Young vs. Korea Information Communications | Kuk Young vs. Automobile Pc | Kuk Young vs. Golden Bridge Investment | Kuk Young vs. Asiana Airlines |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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