Correlation Between Korea Closed and Balanced Fund

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

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

Diversification Opportunities for Korea Closed and Balanced Fund

0.03

Correlation Coefficient

Korea Closed  Balanced Fund

Significant diversification

The 3 months correlation between Korea and Balanced is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed and Balanced Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Instit and Korea Closed 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 Closed are associated (or correlated) with Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Instit has no effect on the direction of Korea Closed i.e., Korea Closed and Balanced Fund go up and down completely randomly.

Pair Corralation between Korea Closed and Balanced Fund

Allowing for the 90-day total investment horizon Korea Closed is expected to generate 1.68 times more return on investment than Balanced Fund. However, Korea Closed is 1.68 times more volatile than Balanced Fund Institutional. It trades about 0.06 of its potential returns per unit of risk. Balanced Fund Institutional is currently generating about -0.11 per unit of risk. If you would invest  1,999  in Korea Closed on November 29, 2024 and sell it today you would earn a total of  77.00  from holding Korea Closed or generate 3.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Korea Closed  vs.  Balanced Fund Institutional

Korea Closed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Korea Closed are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, Korea Closed is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Balanced Fund Instit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Balanced Fund Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Balanced Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Korea Closed and Balanced Fund

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

The idea behind Korea Closed and Balanced Fund Institutional 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.