Correlation Between Korea Electric and Viridian Therapeutics
Can any of the company-specific risk be diversified away by investing in both Korea Electric and Viridian 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 Viridian 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 Viridian Therapeutics, you can compare the effects of market volatilities on Korea Electric and Viridian 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 Viridian Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Electric and Viridian Therapeutics.
Diversification Opportunities for Korea Electric and Viridian Therapeutics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Viridian is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Korea Electric Power and Viridian Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viridian 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 Viridian Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viridian Therapeutics has no effect on the direction of Korea Electric i.e., Korea Electric and Viridian Therapeutics go up and down completely randomly.
Pair Corralation between Korea Electric and Viridian Therapeutics
Considering the 90-day investment horizon Korea Electric Power is expected to generate 0.54 times more return on investment than Viridian Therapeutics. However, Korea Electric Power is 1.87 times less risky than Viridian Therapeutics. It trades about 0.11 of its potential returns per unit of risk. Viridian Therapeutics is currently generating about -0.1 per unit of risk. If you would invest 819.00 in Korea Electric Power on August 28, 2024 and sell it today you would earn a total of 36.00 from holding Korea Electric Power or generate 4.4% 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. Viridian Therapeutics
Performance |
| Timeline |
| Korea Electric Power |
| Viridian Therapeutics |
Korea Electric and Viridian Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Electric and Viridian Therapeutics
The main advantage of trading using opposite Korea Electric and Viridian Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Electric position performs unexpectedly, Viridian 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 Viridian Therapeutics will offset losses from the drop in Viridian Therapeutics' long position.| Korea Electric vs. Dominion Energy | Korea Electric vs. Consolidated Edison | Korea Electric vs. Eversource Energy | Korea Electric vs. FirstEnergy |
| Viridian Therapeutics vs. Nuvalent | Viridian Therapeutics vs. Arcellx | Viridian Therapeutics vs. Vaxcyte | Viridian Therapeutics vs. Crinetics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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