Correlation Between Korea Electric and Zencash Investment
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Zencash Investment 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 Zencash Investment 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 Zencash Investment Trust, you can compare the effects of market volatilities on Korea Electric and Zencash Investment 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 Zencash Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Zencash Investment.
Diversification Opportunities for Korea Electric and Zencash Investment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Zencash is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Zencash Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zencash Investment Trust 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 Zencash Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zencash Investment Trust has no effect on the direction of Korea Electric i.e., Korea Electric and Zencash Investment go up and down completely randomly.
Pair Corralation between Korea Electric and Zencash Investment
Considering the 90-day investment horizon Korea Electric Power is expected to generate 0.26 times more return on investment than Zencash Investment. However, Korea Electric Power is 3.78 times less risky than Zencash Investment. It trades about -0.22 of its potential returns per unit of risk. Zencash Investment Trust is currently generating about -0.13 per unit of risk. If you would invest 755.00 in Korea Electric Power on October 11, 2024 and sell it today you would lose (54.00) from holding Korea Electric Power or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Electric Power vs. Zencash Investment Trust
Performance |
| Timeline |
| Korea Electric Power |
| Zencash Investment Trust |
Korea Electric and Zencash Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Zencash Investment
The main advantage of trading using opposite Korea Electric and Zencash Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Zencash Investment 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 Zencash Investment will offset losses from the drop in Zencash Investment'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 |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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