Correlation Between Korea Refractories and M Venture

Can any of the company-specific risk be diversified away by investing in both Korea Refractories and M Venture 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 Refractories and M Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Korea Refractories Co and M Venture Investment, you can compare the effects of market volatilities on Korea Refractories and M Venture 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 Refractories with a short position of M Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Refractories and M Venture.

Diversification Opportunities for Korea Refractories and M Venture

0.0

Correlation Coefficient

Korea Refractories  M Venture

Pay attention - limited upside

The 3 months correlation between Korea and 019590 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Korea Refractories Co and M Venture Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Venture Investment and Korea Refractories 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 Refractories Co are associated (or correlated) with M Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Venture Investment has no effect on the direction of Korea Refractories i.e., Korea Refractories and M Venture go up and down completely randomly.

Pair Corralation between Korea Refractories and M Venture

If you would invest (100.00) in M Venture Investment on December 30, 2024 and sell it today you would earn a total of  100.00  from holding M Venture Investment or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Korea Refractories Co  vs.  M Venture Investment

Korea Refractories

Risk-Adjusted Performance

Very Weak

Over the last 90 days Korea Refractories Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Korea Refractories is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

M Venture Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days M Venture Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, M Venture is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Korea Refractories and M Venture

The main advantage of trading using opposite Korea Refractories and M Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Refractories position performs unexpectedly, M Venture 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 M Venture will offset losses from the drop in M Venture's long position.

The idea behind Korea Refractories Co and M Venture Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.