Correlation Between Korea Real and Synopex
Can any of the company-specific risk be diversified away by investing in both Korea Real and Synopex 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 Real and Synopex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Synopex, you can compare the effects of market volatilities on Korea Real and Synopex 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 Real with a short position of Synopex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Synopex.
Diversification Opportunities for Korea Real and Synopex
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Synopex is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex and Korea Real 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 Real Estate are associated (or correlated) with Synopex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopex has no effect on the direction of Korea Real i.e., Korea Real and Synopex go up and down completely randomly.
Pair Corralation between Korea Real and Synopex
Assuming the 90 days trading horizon Korea Real is expected to generate 16.75 times less return on investment than Synopex. But when comparing it to its historical volatility, Korea Real Estate is 2.91 times less risky than Synopex. It trades about 0.05 of its potential returns per unit of risk. Synopex is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 533,333 in Synopex on October 9, 2024 and sell it today you would earn a total of 93,667 from holding Synopex or generate 17.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Korea Real Estate vs. Synopex
Performance |
Timeline |
Korea Real Estate |
Synopex |
Korea Real and Synopex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Real and Synopex
The main advantage of trading using opposite Korea Real and Synopex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Synopex 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 Synopex will offset losses from the drop in Synopex's long position.Korea Real vs. Dongwoo Farm To | Korea Real vs. ENERGYMACHINERY KOREA CoLtd | Korea Real vs. Kukil Metal Co | Korea Real vs. Nam Hwa Construction |
Synopex vs. KMH Hitech Co | Synopex vs. GemVaxKAEL CoLtd | Synopex vs. Bosung Power Technology | Synopex vs. Busan Industrial Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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