Correlation Between Korea Closed and Performance Trust
Can any of the company-specific risk be diversified away by investing in both Korea Closed and Performance Trust 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 Performance Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Closed and Performance Trust Strategic, you can compare the effects of market volatilities on Korea Closed and Performance Trust 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 Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Closed and Performance Trust.
Diversification Opportunities for Korea Closed and Performance Trust
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Performance is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust 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 Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Korea Closed i.e., Korea Closed and Performance Trust go up and down completely randomly.
Pair Corralation between Korea Closed and Performance Trust
Allowing for the 90-day total investment horizon Korea Closed is expected to under-perform the Performance Trust. In addition to that, Korea Closed is 3.84 times more volatile than Performance Trust Strategic. It trades about -0.16 of its total potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.11 per unit of volatility. If you would invest 1,965 in Performance Trust Strategic on August 29, 2024 and sell it today you would earn a total of 19.00 from holding Performance Trust Strategic or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Closed vs. Performance Trust Strategic
Performance |
| Timeline |
| Korea Closed |
| Performance Trust |
Korea Closed and Performance Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Closed and Performance Trust
The main advantage of trading using opposite Korea Closed and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Closed position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust'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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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