Correlation Between Korea Computer and Cloud Air
Can any of the company-specific risk be diversified away by investing in both Korea Computer and Cloud Air 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 Computer and Cloud Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and Cloud Air CoLtd, you can compare the effects of market volatilities on Korea Computer and Cloud Air 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 Computer with a short position of Cloud Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Cloud Air.
Diversification Opportunities for Korea Computer and Cloud Air
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Cloud is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and Cloud Air CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Air CoLtd and Korea Computer 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 Computer are associated (or correlated) with Cloud Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Air CoLtd has no effect on the direction of Korea Computer i.e., Korea Computer and Cloud Air go up and down completely randomly.
Pair Corralation between Korea Computer and Cloud Air
Assuming the 90 days trading horizon Korea Computer is expected to generate 1.41 times more return on investment than Cloud Air. However, Korea Computer is 1.41 times more volatile than Cloud Air CoLtd. It trades about 0.1 of its potential returns per unit of risk. Cloud Air CoLtd is currently generating about 0.04 per unit of risk. If you would invest 476,000 in Korea Computer on September 25, 2024 and sell it today you would earn a total of 58,000 from holding Korea Computer or generate 12.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Korea Computer vs. Cloud Air CoLtd
Performance |
Timeline |
Korea Computer |
Cloud Air CoLtd |
Korea Computer and Cloud Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Computer and Cloud Air
The main advantage of trading using opposite Korea Computer and Cloud Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, Cloud Air 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 Cloud Air will offset losses from the drop in Cloud Air's long position.Korea Computer vs. Dongsin Engineering Construction | Korea Computer vs. Doosan Fuel Cell | Korea Computer vs. Daishin Balance 1 | Korea Computer vs. Total Soft Bank |
Cloud Air vs. BIT Computer Co | Cloud Air vs. Inzi Display CoLtd | Cloud Air vs. Okins Electronics Co | Cloud Air vs. Korea Computer |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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