Correlation Between Korea New and Aniplus

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

By analyzing existing cross correlation between Korea New Network and Aniplus, you can compare the effects of market volatilities on Korea New and Aniplus 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 New with a short position of Aniplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and Aniplus.

Diversification Opportunities for Korea New and Aniplus

-0.33

Correlation Coefficient

Korea New  Aniplus

Very good diversification

The 3 months correlation between Korea and Aniplus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and Aniplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aniplus and Korea New 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 New Network are associated (or correlated) with Aniplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aniplus has no effect on the direction of Korea New i.e., Korea New and Aniplus go up and down completely randomly.

Pair Corralation between Korea New and Aniplus

Assuming the 90 days trading horizon Korea New Network is expected to under-perform the Aniplus. But the stock apears to be less risky and, when comparing its historical volatility, Korea New Network is 1.27 times less risky than Aniplus. The stock trades about -0.09 of its potential returns per unit of risk. The Aniplus is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  241,500  in Aniplus on October 9, 2024 and sell it today you would earn a total of  22,500  from holding Aniplus or generate 9.32% return on investment over 90 days.

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

Korea New Network  vs.  Aniplus

Korea New Network

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Korea New Network are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Korea New may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aniplus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aniplus 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 New and Aniplus

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

The idea behind Korea New Network and Aniplus 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.