Correlation Between Korea Electric and Compass Therapeutics
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Compass Therapeutics 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 Compass Therapeutics 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 Compass Therapeutics, you can compare the effects of market volatilities on Korea Electric and Compass Therapeutics 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 Compass Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Compass Therapeutics.
Diversification Opportunities for Korea Electric and Compass Therapeutics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Compass is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Compass Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Therapeutics 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 Compass Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Therapeutics has no effect on the direction of Korea Electric i.e., Korea Electric and Compass Therapeutics go up and down completely randomly.
Pair Corralation between Korea Electric and Compass Therapeutics
Considering the 90-day investment horizon Korea Electric Power is expected to generate 0.44 times more return on investment than Compass Therapeutics. However, Korea Electric Power is 2.26 times less risky than Compass Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Compass Therapeutics is currently generating about -0.02 per unit of risk. If you would invest 758.00 in Korea Electric Power on August 28, 2024 and sell it today you would earn a total of 97.00 from holding Korea Electric Power or generate 12.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. Compass Therapeutics
Performance |
| Timeline |
| Korea Electric Power |
| Compass Therapeutics |
Korea Electric and Compass Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Compass Therapeutics
The main advantage of trading using opposite Korea Electric and Compass Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Compass Therapeutics 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 Compass Therapeutics will offset losses from the drop in Compass Therapeutics' long position.| Korea Electric vs. Dominion Energy | Korea Electric vs. Consolidated Edison | Korea Electric vs. Eversource Energy | Korea Electric vs. FirstEnergy |
| Compass Therapeutics vs. Eliem Therapeutics | Compass Therapeutics vs. HCW Biologics | Compass Therapeutics vs. Scpharmaceuticals | Compass Therapeutics vs. Milestone Pharmaceuticals |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |