Correlation Between SH Energy and Cuckoo Homesys
Can any of the company-specific risk be diversified away by investing in both SH Energy and Cuckoo Homesys 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 SH Energy and Cuckoo Homesys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and Cuckoo Homesys Co, you can compare the effects of market volatilities on SH Energy and Cuckoo Homesys 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 SH Energy with a short position of Cuckoo Homesys. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and Cuckoo Homesys.
Diversification Opportunities for SH Energy and Cuckoo Homesys
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 002360 and Cuckoo is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and Cuckoo Homesys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Homesys and SH Energy 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 SH Energy Chemical are associated (or correlated) with Cuckoo Homesys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Homesys has no effect on the direction of SH Energy i.e., SH Energy and Cuckoo Homesys go up and down completely randomly.
Pair Corralation between SH Energy and Cuckoo Homesys
Assuming the 90 days trading horizon SH Energy Chemical is expected to under-perform the Cuckoo Homesys. But the stock apears to be less risky and, when comparing its historical volatility, SH Energy Chemical is 1.6 times less risky than Cuckoo Homesys. The stock trades about -0.2 of its potential returns per unit of risk. The Cuckoo Homesys Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,931,000 in Cuckoo Homesys Co on November 28, 2024 and sell it today you would earn a total of 134,000 from holding Cuckoo Homesys Co or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SH Energy Chemical vs. Cuckoo Homesys Co
Performance |
| Timeline |
| SH Energy Chemical |
| Cuckoo Homesys |
SH Energy and Cuckoo Homesys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and Cuckoo Homesys
The main advantage of trading using opposite SH Energy and Cuckoo Homesys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, Cuckoo Homesys 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 Cuckoo Homesys will offset losses from the drop in Cuckoo Homesys' long position.| SH Energy vs. SV Investment | SH Energy vs. LG Chemicals | SH Energy vs. Vina Technology Co | SH Energy vs. Hwangkum Steel Technology |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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