Correlation Between Korea Information and Cuckoo Homesys

Can any of the company-specific risk be diversified away by investing in both Korea Information and Cuckoo Homesys 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 Cuckoo Homesys 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 Cuckoo Homesys Co, you can compare the effects of market volatilities on Korea Information and Cuckoo Homesys 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 Cuckoo Homesys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Cuckoo Homesys.

Diversification Opportunities for Korea Information and Cuckoo Homesys

0.56

Correlation Coefficient

Korea Information  Cuckoo Homesys

Very weak diversification

The 3 months correlation between Korea and Cuckoo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering and Cuckoo Homesys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Homesys 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 Cuckoo Homesys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Homesys has no effect on the direction of Korea Information i.e., Korea Information and Cuckoo Homesys go up and down completely randomly.

Pair Corralation between Korea Information and Cuckoo Homesys

Assuming the 90 days trading horizon Korea Information is expected to generate 24.23 times less return on investment than Cuckoo Homesys. In addition to that, Korea Information is 1.54 times more volatile than Cuckoo Homesys Co. It trades about 0.0 of its total potential returns per unit of risk. Cuckoo Homesys Co is currently generating about 0.18 per unit of volatility. If you would invest  1,894,000  in Cuckoo Homesys Co on October 8, 2024 and sell it today you would earn a total of  111,000  from holding Cuckoo Homesys Co or generate 5.86% return on investment over 90 days.

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

Korea Information Engineering  vs.  Cuckoo Homesys Co

Korea Information

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cuckoo Homesys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cuckoo Homesys Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Korea Information and Cuckoo Homesys

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

The idea behind Korea Information Engineering and Cuckoo Homesys Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.