Correlation Between ISU Chemical and Atinum Investment
Can any of the company-specific risk be diversified away by investing in both ISU Chemical and Atinum Investment 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 ISU Chemical and Atinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISU Chemical Co and Atinum Investment Co, you can compare the effects of market volatilities on ISU Chemical and Atinum Investment 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 ISU Chemical with a short position of Atinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISU Chemical and Atinum Investment.
Diversification Opportunities for ISU Chemical and Atinum Investment
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between ISU and Atinum is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding ISU Chemical Co and Atinum Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atinum Investment and ISU Chemical 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 ISU Chemical Co are associated (or correlated) with Atinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atinum Investment has no effect on the direction of ISU Chemical i.e., ISU Chemical and Atinum Investment go up and down completely randomly.
Pair Corralation between ISU Chemical and Atinum Investment
Assuming the 90 days trading horizon ISU Chemical Co is expected to under-perform the Atinum Investment. In addition to that, ISU Chemical is 1.1 times more volatile than Atinum Investment Co. It trades about -0.07 of its total potential returns per unit of risk. Atinum Investment Co is currently generating about 0.0 per unit of volatility. If you would invest 269,386 in Atinum Investment Co on September 14, 2024 and sell it today you would lose (37,386) from holding Atinum Investment Co or give up 13.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ISU Chemical Co vs. Atinum Investment Co
Performance |
| Timeline |
| ISU Chemical |
| Atinum Investment |
ISU Chemical and Atinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISU Chemical and Atinum Investment
The main advantage of trading using opposite ISU Chemical and Atinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISU Chemical position performs unexpectedly, Atinum Investment 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 Atinum Investment will offset losses from the drop in Atinum Investment's long position.| ISU Chemical vs. Atinum Investment Co | ISU Chemical vs. CJ Seafood Corp | ISU Chemical vs. KTB Investment Securities | ISU Chemical vs. Daol Investment Securities |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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