Correlation Between LEADCORP and Kuk Young

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

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

Diversification Opportunities for LEADCORP and Kuk Young

-0.36

Correlation Coefficient

LEADCORP  Kuk Young

Very good diversification

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

Pair Corralation between LEADCORP and Kuk Young

Assuming the 90 days trading horizon The LEADCORP is expected to under-perform the Kuk Young. But the stock apears to be less risky and, when comparing its historical volatility, The LEADCORP is 6.86 times less risky than Kuk Young. The stock trades about -0.22 of its potential returns per unit of risk. The Kuk Young GM is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  178,700  in Kuk Young GM on September 13, 2024 and sell it today you would earn a total of  46,300  from holding Kuk Young GM or generate 25.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

The LEADCORP  vs.  Kuk Young GM

LEADCORP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The LEADCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kuk Young GM

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kuk Young GM are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kuk Young sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LEADCORP and Kuk Young

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

The idea behind The LEADCORP and Kuk Young GM 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.