Correlation Between Koh Young and BH

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

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

Diversification Opportunities for Koh Young and BH

-0.37

Correlation Coefficient

Koh Young  BH

Very good diversification

The 3 months correlation between Koh and BH is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and BH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Co and Koh Young 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 Koh Young Technology are associated (or correlated) with BH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Co has no effect on the direction of Koh Young i.e., Koh Young and BH go up and down completely randomly.

Pair Corralation between Koh Young and BH

Assuming the 90 days trading horizon Koh Young is expected to generate 3.12 times less return on investment than BH. In addition to that, Koh Young is 1.92 times more volatile than BH Co. It trades about 0.01 of its total potential returns per unit of risk. BH Co is currently generating about 0.07 per unit of volatility. If you would invest  1,463,000  in BH Co on December 4, 2024 and sell it today you would earn a total of  39,000  from holding BH Co or generate 2.67% return on investment over 90 days.

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

Koh Young Technology  vs.  BH Co

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.

BH Co

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Koh Young and BH

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

The idea behind Koh Young Technology and BH Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..