Correlation Between Korea Electric and Cellectar Biosciences
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Cellectar Biosciences 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 Korea Electric and Cellectar Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Electric Power and Cellectar Biosciences, you can compare the effects of market volatilities on Korea Electric and Cellectar Biosciences 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 Korea Electric with a short position of Cellectar Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Cellectar Biosciences.
Diversification Opportunities for Korea Electric and Cellectar Biosciences
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Cellectar is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Cellectar Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellectar Biosciences and Korea Electric 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 Korea Electric Power are associated (or correlated) with Cellectar Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellectar Biosciences has no effect on the direction of Korea Electric i.e., Korea Electric and Cellectar Biosciences go up and down completely randomly.
Pair Corralation between Korea Electric and Cellectar Biosciences
Considering the 90-day investment horizon Korea Electric Power is expected to generate 0.42 times more return on investment than Cellectar Biosciences. However, Korea Electric Power is 2.37 times less risky than Cellectar Biosciences. It trades about 0.04 of its potential returns per unit of risk. Cellectar Biosciences is currently generating about 0.01 per unit of risk. If you would invest 743.00 in Korea Electric Power on September 1, 2024 and sell it today you would earn a total of 157.00 from holding Korea Electric Power or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. Cellectar Biosciences
Performance |
| Timeline |
| Korea Electric Power |
| Cellectar Biosciences |
Korea Electric and Cellectar Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Cellectar Biosciences
The main advantage of trading using opposite Korea Electric and Cellectar Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Cellectar Biosciences 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 Cellectar Biosciences will offset losses from the drop in Cellectar Biosciences' long position.| Korea Electric vs. MGE Energy | Korea Electric vs. CMS Energy | Korea Electric vs. OGE Energy | Korea Electric vs. DTE Energy |
| Cellectar Biosciences vs. Monopar Therapeutics | Cellectar Biosciences vs. Pulmatrix | Cellectar Biosciences vs. Tenax Therapeutics | Cellectar Biosciences vs. Bio Path Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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