Correlation Between Coloray International and KyungIn Electronics

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

By analyzing existing cross correlation between Coloray International Investment and KyungIn Electronics Co, you can compare the effects of market volatilities on Coloray International and KyungIn Electronics 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 Coloray International with a short position of KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and KyungIn Electronics.

Diversification Opportunities for Coloray International and KyungIn Electronics

-0.3

Correlation Coefficient

Coloray International  KyungIn Electronics

Very good diversification

The 3 months correlation between Coloray and KyungIn is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics and Coloray International 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 Coloray International Investment are associated (or correlated) with KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Coloray International i.e., Coloray International and KyungIn Electronics go up and down completely randomly.

Pair Corralation between Coloray International and KyungIn Electronics

Assuming the 90 days trading horizon Coloray International Investment is expected to under-perform the KyungIn Electronics. In addition to that, Coloray International is 1.86 times more volatile than KyungIn Electronics Co. It trades about -0.04 of its total potential returns per unit of risk. KyungIn Electronics Co is currently generating about 0.08 per unit of volatility. If you would invest  2,080,000  in KyungIn Electronics Co on September 16, 2024 and sell it today you would earn a total of  160,000  from holding KyungIn Electronics Co or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Coloray International Investme  vs.  KyungIn Electronics Co

Coloray International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coloray International Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

KyungIn Electronics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KyungIn Electronics Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KyungIn Electronics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Coloray International and KyungIn Electronics

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

The idea behind Coloray International Investment and KyungIn Electronics Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.