Correlation Between EBEST Investment and Koh Young

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

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

Diversification Opportunities for EBEST Investment and Koh Young

0.3

Correlation Coefficient

EBEST Investment  Koh Young

Weak diversification

The 3 months correlation between EBEST and Koh is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities 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 EBEST Investment 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 EBEST Investment Securities 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 EBEST Investment i.e., EBEST Investment and Koh Young go up and down completely randomly.

Pair Corralation between EBEST Investment and Koh Young

Assuming the 90 days trading horizon EBEST Investment is expected to generate 82.08 times less return on investment than Koh Young. But when comparing it to its historical volatility, EBEST Investment Securities is 4.08 times less risky than Koh Young. It trades about 0.01 of its potential returns per unit of risk. Koh Young Technology is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  803,071  in Koh Young Technology on December 30, 2024 and sell it today you would earn a total of  596,929  from holding Koh Young Technology or generate 74.33% return on investment over 90 days.

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

EBEST Investment Securities  vs.  Koh Young Technology

EBEST Investment Sec

Risk-Adjusted Performance

Very Weak

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

Koh Young Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Koh Young Technology are ranked lower than 14 (%) 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 EBEST Investment and Koh Young

The main advantage of trading using opposite EBEST Investment and Koh Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment 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 EBEST Investment Securities 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.