Correlation Between Kyung In and Cherrybro CoLtd

Can any of the company-specific risk be diversified away by investing in both Kyung In and Cherrybro CoLtd 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 Kyung In and Cherrybro CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kyung In Synthetic Corp and Cherrybro coLtd, you can compare the effects of market volatilities on Kyung In and Cherrybro CoLtd 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 Kyung In with a short position of Cherrybro CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung In and Cherrybro CoLtd.

Diversification Opportunities for Kyung In and Cherrybro CoLtd

0.17

Correlation Coefficient

Kyung In  Cherrybro CoLtd

Average diversification

The 3 months correlation between Kyung and Cherrybro is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kyung In Synthetic Corp and Cherrybro coLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherrybro coLtd and Kyung In 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 Kyung In Synthetic Corp are associated (or correlated) with Cherrybro CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherrybro coLtd has no effect on the direction of Kyung In i.e., Kyung In and Cherrybro CoLtd go up and down completely randomly.

Pair Corralation between Kyung In and Cherrybro CoLtd

Assuming the 90 days trading horizon Kyung In Synthetic Corp is expected to generate 0.35 times more return on investment than Cherrybro CoLtd. However, Kyung In Synthetic Corp is 2.83 times less risky than Cherrybro CoLtd. It trades about 0.13 of its potential returns per unit of risk. Cherrybro coLtd is currently generating about 0.03 per unit of risk. If you would invest  272,000  in Kyung In Synthetic Corp on December 25, 2024 and sell it today you would earn a total of  29,500  from holding Kyung In Synthetic Corp or generate 10.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kyung In Synthetic Corp  vs.  Cherrybro coLtd

Kyung In Synthetic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kyung In Synthetic Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kyung In may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cherrybro coLtd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cherrybro coLtd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cherrybro CoLtd may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kyung In and Cherrybro CoLtd

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

The idea behind Kyung In Synthetic Corp and Cherrybro coLtd 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.