Correlation Between Total Soft and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Total Soft and Korea Computer 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 Total Soft and Korea Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and Korea Computer, you can compare the effects of market volatilities on Total Soft and Korea Computer 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 Total Soft with a short position of Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and Korea Computer.
Diversification Opportunities for Total Soft and Korea Computer
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Total and Korea is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer and Total Soft 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 Total Soft Bank are associated (or correlated) with Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Total Soft i.e., Total Soft and Korea Computer go up and down completely randomly.
Pair Corralation between Total Soft and Korea Computer
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 3.12 times more return on investment than Korea Computer. However, Total Soft is 3.12 times more volatile than Korea Computer. It trades about 0.16 of its potential returns per unit of risk. Korea Computer is currently generating about -0.02 per unit of risk. If you would invest 486,500 in Total Soft Bank on September 26, 2024 and sell it today you would earn a total of 453,500 from holding Total Soft Bank or generate 93.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Total Soft Bank vs. Korea Computer
Performance |
Timeline |
Total Soft Bank |
Korea Computer |
Total Soft and Korea Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Total Soft and Korea Computer
The main advantage of trading using opposite Total Soft and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft position performs unexpectedly, Korea Computer 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 Korea Computer will offset losses from the drop in Korea Computer's long position.Total Soft vs. Leaders Technology Investment | Total Soft vs. Pungguk Ethanol Industrial | Total Soft vs. Myoung Shin Industrial | Total Soft vs. Kbi Metal Co |
Korea Computer vs. Dongsin Engineering Construction | Korea Computer vs. Doosan Fuel Cell | Korea Computer vs. Daishin Balance 1 | Korea Computer vs. Total Soft Bank |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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