Correlation Between Kyung Chang and Global Standard

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Can any of the company-specific risk be diversified away by investing in both Kyung Chang and Global Standard 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 Chang and Global Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung Chang Industrial and Global Standard Technology, you can compare the effects of market volatilities on Kyung Chang and Global Standard 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 Chang with a short position of Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung Chang and Global Standard.

Diversification Opportunities for Kyung Chang and Global Standard

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Kyung Chang and Global Standard

If you would invest  1,450,000  in Global Standard Technology on September 7, 2024 and sell it today you would earn a total of  121,000  from holding Global Standard Technology or generate 8.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.69%
ValuesDaily Returns

Kyung Chang Industrial  vs.  Global Standard Technology

 Performance 
       Timeline  
Kyung Chang Industrial 

Risk-Adjusted Performance

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

Risk-Adjusted Performance

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Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Global Standard Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global Standard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kyung Chang and Global Standard Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kyung Chang and Global Standard

The main advantage of trading using opposite Kyung Chang and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung Chang position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.
The idea behind Kyung Chang Industrial and Global Standard Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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