Correlation Between Koryo Credit and Taegu Broadcasting

Can any of the company-specific risk be diversified away by investing in both Koryo Credit and Taegu Broadcasting 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 Koryo Credit and Taegu Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koryo Credit Information and Taegu Broadcasting, you can compare the effects of market volatilities on Koryo Credit and Taegu Broadcasting 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 Koryo Credit with a short position of Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Taegu Broadcasting.

Diversification Opportunities for Koryo Credit and Taegu Broadcasting

0.6

Correlation Coefficient

Koryo Credit  Taegu Broadcasting

Poor diversification

The 3 months correlation between Koryo and Taegu is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting and Koryo Credit 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 Koryo Credit Information are associated (or correlated) with Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Koryo Credit i.e., Koryo Credit and Taegu Broadcasting go up and down completely randomly.

Pair Corralation between Koryo Credit and Taegu Broadcasting

Assuming the 90 days trading horizon Koryo Credit Information is expected to generate 0.32 times more return on investment than Taegu Broadcasting. However, Koryo Credit Information is 3.08 times less risky than Taegu Broadcasting. It trades about -0.1 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.06 per unit of risk. If you would invest  1,002,346  in Koryo Credit Information on December 23, 2024 and sell it today you would lose (35,346) from holding Koryo Credit Information or give up 3.53% of portfolio value over 90 days.

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

Koryo Credit Information  vs.  Taegu Broadcasting

Koryo Credit Information

Risk-Adjusted Performance

Very Weak

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

Taegu Broadcasting

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taegu Broadcasting 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 Koryo Credit and Taegu Broadcasting

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

The idea behind Koryo Credit Information and Taegu Broadcasting 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.