Correlation Between Guyoung Technology and Koh Young

Can any of the company-specific risk be diversified away by investing in both Guyoung Technology and Koh Young 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 Guyoung Technology and Koh Young into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guyoung Technology Co and Koh Young Technology, you can compare the effects of market volatilities on Guyoung Technology and Koh Young 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 Guyoung Technology with a short position of Koh Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guyoung Technology and Koh Young.

Diversification Opportunities for Guyoung Technology and Koh Young

0.92

Correlation Coefficient

Guyoung Technology  Koh Young

Almost no diversification

The 3 months correlation between Guyoung and Koh is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Guyoung Technology Co and Koh Young Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koh Young Technology and Guyoung Technology 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 Guyoung Technology Co are associated (or correlated) with Koh Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koh Young Technology has no effect on the direction of Guyoung Technology i.e., Guyoung Technology and Koh Young go up and down completely randomly.

Pair Corralation between Guyoung Technology and Koh Young

Assuming the 90 days trading horizon Guyoung Technology Co is expected to generate 0.52 times more return on investment than Koh Young. However, Guyoung Technology Co is 1.94 times less risky than Koh Young. It trades about 0.08 of its potential returns per unit of risk. Koh Young Technology is currently generating about 0.01 per unit of risk. If you would invest  217,500  in Guyoung Technology Co on December 4, 2024 and sell it today you would earn a total of  7,500  from holding Guyoung Technology Co or generate 3.45% return on investment over 90 days.

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

Guyoung Technology Co  vs.  Koh Young Technology

Guyoung Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guyoung Technology Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guyoung Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Koh Young Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Koh Young Technology are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Koh Young sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guyoung Technology and Koh Young

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

The idea behind Guyoung Technology Co and Koh Young 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.