Correlation Between Microfriend and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Microfriend and Kyeryong Construction 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 Microfriend and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Kyeryong Construction Industrial, you can compare the effects of market volatilities on Microfriend and Kyeryong Construction 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 Microfriend with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Kyeryong Construction.
Diversification Opportunities for Microfriend and Kyeryong Construction
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Microfriend and Kyeryong is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and Microfriend 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 Microfriend are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Microfriend i.e., Microfriend and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Microfriend and Kyeryong Construction
Assuming the 90 days trading horizon Microfriend is expected to generate 5.44 times more return on investment than Kyeryong Construction. However, Microfriend is 5.44 times more volatile than Kyeryong Construction Industrial. It trades about 0.0 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.14 per unit of risk. If you would invest 326,000 in Microfriend on September 13, 2024 and sell it today you would lose (36,000) from holding Microfriend or give up 11.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Microfriend vs. Kyeryong Construction Industri
Performance |
Timeline |
Microfriend |
Kyeryong Construction |
Microfriend and Kyeryong Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Microfriend and Kyeryong Construction
The main advantage of trading using opposite Microfriend and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.Microfriend vs. Mobile Appliance | Microfriend vs. Hanjoo Light Metal | Microfriend vs. Digital Power Communications | Microfriend vs. Daejung Chemicals Metals |
Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. Samsung Electronics Co | Kyeryong Construction vs. SK Hynix | Kyeryong Construction vs. POSCO Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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