Correlation Between Korea Closed and Central Europe
Can any of the company-specific risk be diversified away by investing in both Korea Closed and Central Europe 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 Closed and Central Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Closed and Central Europe Russia, you can compare the effects of market volatilities on Korea Closed and Central Europe 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 Closed with a short position of Central Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Closed and Central Europe.
Diversification Opportunities for Korea Closed and Central Europe
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Central is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed and Central Europe Russia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Europe Russia and Korea Closed 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 Closed are associated (or correlated) with Central Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Europe Russia has no effect on the direction of Korea Closed i.e., Korea Closed and Central Europe go up and down completely randomly.
Pair Corralation between Korea Closed and Central Europe
Allowing for the 90-day total investment horizon Korea Closed is expected to generate 2.18 times less return on investment than Central Europe. But when comparing it to its historical volatility, Korea Closed is 2.0 times less risky than Central Europe. It trades about 0.16 of its potential returns per unit of risk. Central Europe Russia is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,113 in Central Europe Russia on October 20, 2024 and sell it today you would earn a total of 94.00 from holding Central Europe Russia or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Korea Closed vs. Central Europe Russia
Performance |
| Timeline |
| Korea Closed |
| Central Europe Russia |
Korea Closed and Central Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Closed and Central Europe
The main advantage of trading using opposite Korea Closed and Central Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Closed position performs unexpectedly, Central Europe 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 Central Europe will offset losses from the drop in Central Europe's long position.| Korea Closed vs. Mexico Equity And | Korea Closed vs. Western Asset Global | Korea Closed vs. New Germany Closed | Korea Closed vs. MFS Charter Income |
| Central Europe vs. Mexico Closed | Central Europe vs. NXG NextGen Infrastructure | Central Europe vs. Taiwan Closed | Central Europe vs. Japan Smaller Capitalization |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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