Correlation Between Korea Closed and Pimco New
Can any of the company-specific risk be diversified away by investing in both Korea Closed and Pimco New 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 Pimco New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Closed and Pimco New York, you can compare the effects of market volatilities on Korea Closed and Pimco New 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 Pimco New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Closed and Pimco New.
Diversification Opportunities for Korea Closed and Pimco New
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Pimco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed and Pimco New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco New York 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 Pimco New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco New York has no effect on the direction of Korea Closed i.e., Korea Closed and Pimco New go up and down completely randomly.
Pair Corralation between Korea Closed and Pimco New
Allowing for the 90-day total investment horizon Korea Closed is expected to generate 1.83 times more return on investment than Pimco New. However, Korea Closed is 1.83 times more volatile than Pimco New York. It trades about 0.16 of its potential returns per unit of risk. Pimco New York is currently generating about -0.04 per unit of risk. If you would invest 1,907 in Korea Closed on October 20, 2024 and sell it today you would earn a total of 71.00 from holding Korea Closed or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Korea Closed vs. Pimco New York
Performance |
| Timeline |
| Korea Closed |
| Pimco New York |
Korea Closed and Pimco New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Closed and Pimco New
The main advantage of trading using opposite Korea Closed and Pimco New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Closed position performs unexpectedly, Pimco New 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 Pimco New will offset losses from the drop in Pimco New'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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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