Correlation Between Korea Information and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Korea Information and Incar Financial 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 Information and Incar Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Engineering and Incar Financial Service, you can compare the effects of market volatilities on Korea Information and Incar Financial 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 Information with a short position of Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Incar Financial.
Diversification Opportunities for Korea Information and Incar Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Incar is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service and Korea Information 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 Information Engineering are associated (or correlated) with Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Korea Information i.e., Korea Information and Incar Financial go up and down completely randomly.
Pair Corralation between Korea Information and Incar Financial
Assuming the 90 days trading horizon Korea Information Engineering is expected to under-perform the Incar Financial. But the stock apears to be less risky and, when comparing its historical volatility, Korea Information Engineering is 1.48 times less risky than Incar Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Incar Financial Service is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 456,500 in Incar Financial Service on September 24, 2024 and sell it today you would earn a total of 93,500 from holding Incar Financial Service or generate 20.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Korea Information Engineering vs. Incar Financial Service
Performance |
Timeline |
Korea Information |
Incar Financial Service |
Korea Information and Incar Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Information and Incar Financial
The main advantage of trading using opposite Korea Information and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.Korea Information vs. Dongsin Engineering Construction | Korea Information vs. Doosan Fuel Cell | Korea Information vs. Daishin Balance 1 | Korea Information vs. Total Soft Bank |
Incar Financial vs. Adaptive Plasma Technology | Incar Financial vs. Global Standard Technology | Incar Financial vs. Jeong Moon Information | Incar Financial vs. Korea Information Engineering |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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