Correlation Between Ko Ja and ASRock

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

By analyzing existing cross correlation between Ko Ja Cayman and ASRock Inc, you can compare the effects of market volatilities on Ko Ja and ASRock 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 Ko Ja with a short position of ASRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ko Ja and ASRock.

Diversification Opportunities for Ko Ja and ASRock

0.36

Correlation Coefficient

Ko Ja  ASRock

Weak diversification

The 3 months correlation between 5215 and ASRock is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ko Ja Cayman and ASRock Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASRock Inc and Ko Ja 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 Ko Ja Cayman are associated (or correlated) with ASRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASRock Inc has no effect on the direction of Ko Ja i.e., Ko Ja and ASRock go up and down completely randomly.

Pair Corralation between Ko Ja and ASRock

Assuming the 90 days trading horizon Ko Ja Cayman is expected to generate 0.46 times more return on investment than ASRock. However, Ko Ja Cayman is 2.18 times less risky than ASRock. It trades about -0.09 of its potential returns per unit of risk. ASRock Inc is currently generating about -0.09 per unit of risk. If you would invest  4,555  in Ko Ja Cayman on December 29, 2024 and sell it today you would lose (305.00) from holding Ko Ja Cayman or give up 6.7% of portfolio value over 90 days.

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

Ko Ja Cayman  vs.  ASRock Inc

Ko Ja Cayman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ko Ja Cayman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

ASRock Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASRock Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Ko Ja and ASRock

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

The idea behind Ko Ja Cayman and ASRock Inc 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.