Correlation Between EE HWA and Yooshin Engineering
Can any of the company-specific risk be diversified away by investing in both EE HWA and Yooshin Engineering 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 EE HWA and Yooshin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EE HWA Construction Co and Yooshin Engineering, you can compare the effects of market volatilities on EE HWA and Yooshin Engineering 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 EE HWA with a short position of Yooshin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of EE HWA and Yooshin Engineering.
Diversification Opportunities for EE HWA and Yooshin Engineering
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 001840 and Yooshin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding EE HWA Construction Co and Yooshin Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yooshin Engineering and EE HWA 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 EE HWA Construction Co are associated (or correlated) with Yooshin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yooshin Engineering has no effect on the direction of EE HWA i.e., EE HWA and Yooshin Engineering go up and down completely randomly.
Pair Corralation between EE HWA and Yooshin Engineering
Assuming the 90 days trading horizon EE HWA Construction Co is expected to generate 2.62 times more return on investment than Yooshin Engineering. However, EE HWA is 2.62 times more volatile than Yooshin Engineering. It trades about 0.12 of its potential returns per unit of risk. Yooshin Engineering is currently generating about 0.18 per unit of risk. If you would invest 250,000 in EE HWA Construction Co on August 24, 2024 and sell it today you would earn a total of 45,000 from holding EE HWA Construction Co or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EE HWA Construction Co vs. Yooshin Engineering
Performance |
| Timeline |
| EE HWA Construction |
| Yooshin Engineering |
EE HWA and Yooshin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EE HWA and Yooshin Engineering
The main advantage of trading using opposite EE HWA and Yooshin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EE HWA position performs unexpectedly, Yooshin Engineering 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 Yooshin Engineering will offset losses from the drop in Yooshin Engineering's long position.| EE HWA vs. Hanyang ENG Co | EE HWA vs. Nam Hwa Construction | EE HWA vs. KT Submarine Co | EE HWA vs. SEOHAN Const EngcoLtd |
| Yooshin Engineering vs. Shinhan Inverse Silver | Yooshin Engineering vs. Sempio Foods Co | Yooshin Engineering vs. Hansol Homedeco Co | Yooshin Engineering vs. Hyundai Home Shopping |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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