Correlation Between ICC International and Kang Yong
Can any of the company-specific risk be diversified away by investing in both ICC International and Kang Yong 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 ICC International and Kang Yong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC International Public and Kang Yong Electric, you can compare the effects of market volatilities on ICC International and Kang Yong 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 ICC International with a short position of Kang Yong. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC International and Kang Yong.
Diversification Opportunities for ICC International and Kang Yong
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ICC and Kang is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ICC International Public and Kang Yong Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kang Yong Electric and ICC 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 ICC International Public are associated (or correlated) with Kang Yong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kang Yong Electric has no effect on the direction of ICC International i.e., ICC International and Kang Yong go up and down completely randomly.
Pair Corralation between ICC International and Kang Yong
Assuming the 90 days trading horizon ICC International is expected to generate 1.01 times less return on investment than Kang Yong. In addition to that, ICC International is 1.0 times more volatile than Kang Yong Electric. It trades about 0.08 of its total potential returns per unit of risk. Kang Yong Electric is currently generating about 0.08 per unit of volatility. If you would invest 30,339 in Kang Yong Electric on September 2, 2024 and sell it today you would lose (1,639) from holding Kang Yong Electric or give up 5.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
ICC International Public vs. Kang Yong Electric
Performance |
| Timeline |
| ICC International Public |
| Kang Yong Electric |
ICC International and Kang Yong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC International and Kang Yong
The main advantage of trading using opposite ICC International and Kang Yong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC International position performs unexpectedly, Kang Yong 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 Kang Yong will offset losses from the drop in Kang Yong's long position.| ICC International vs. Hana Microelectronics Public | ICC International vs. Hwa Fong Rubber | ICC International vs. Goodyear Public | ICC International vs. BEC World Public |
| Kang Yong vs. Hwa Fong Rubber | Kang Yong vs. Hana Microelectronics Public | Kang Yong vs. KGI Securities Public | Kang Yong vs. Haad Thip Public |
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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