Correlation Between Korea Electric and Generation Bio
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Generation Bio 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 Generation Bio 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 Generation Bio Co, you can compare the effects of market volatilities on Korea Electric and Generation Bio 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 Generation Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Generation Bio.
Diversification Opportunities for Korea Electric and Generation Bio
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Generation is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Generation Bio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Bio 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 Generation Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Bio has no effect on the direction of Korea Electric i.e., Korea Electric and Generation Bio go up and down completely randomly.
Pair Corralation between Korea Electric and Generation Bio
Considering the 90-day investment horizon Korea Electric Power is expected to generate 0.29 times more return on investment than Generation Bio. However, Korea Electric Power is 3.47 times less risky than Generation Bio. It trades about 0.03 of its potential returns per unit of risk. Generation Bio Co is currently generating about 0.0 per unit of risk. If you would invest 754.00 in Korea Electric Power on August 31, 2024 and sell it today you would earn a total of 146.00 from holding Korea Electric Power or generate 19.36% 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. Generation Bio Co
Performance |
| Timeline |
| Korea Electric Power |
| Generation Bio |
Korea Electric and Generation Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Generation Bio
The main advantage of trading using opposite Korea Electric and Generation Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Generation Bio 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 Generation Bio will offset losses from the drop in Generation Bio's long position.| Korea Electric vs. Enel Chile SA | Korea Electric vs. Centrais Eltricas Brasileiras | Korea Electric vs. Central Puerto SA | Korea Electric vs. CMS Energy |
| Generation Bio vs. Monte Rosa Therapeutics | Generation Bio vs. Nkarta Inc | Generation Bio vs. Lyell Immunopharma | Generation Bio vs. Sana Biotechnology |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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