Correlation Between GS Engineering and ENERGYMACHINERY KOREA
Can any of the company-specific risk be diversified away by investing in both GS Engineering and ENERGYMACHINERY KOREA 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 GS Engineering and ENERGYMACHINERY KOREA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and ENERGYMACHINERY KOREA CoLtd, you can compare the effects of market volatilities on GS Engineering and ENERGYMACHINERY KOREA 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 GS Engineering with a short position of ENERGYMACHINERY KOREA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and ENERGYMACHINERY KOREA.
Diversification Opportunities for GS Engineering and ENERGYMACHINERY KOREA
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 006360 and ENERGYMACHINERY is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and ENERGYMACHINERY KOREA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGYMACHINERY KOREA and GS Engineering 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 GS Engineering Construction are associated (or correlated) with ENERGYMACHINERY KOREA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGYMACHINERY KOREA has no effect on the direction of GS Engineering i.e., GS Engineering and ENERGYMACHINERY KOREA go up and down completely randomly.
Pair Corralation between GS Engineering and ENERGYMACHINERY KOREA
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 0.85 times more return on investment than ENERGYMACHINERY KOREA. However, GS Engineering Construction is 1.18 times less risky than ENERGYMACHINERY KOREA. It trades about 0.0 of its potential returns per unit of risk. ENERGYMACHINERY KOREA CoLtd is currently generating about -0.01 per unit of risk. If you would invest 2,131,146 in GS Engineering Construction on October 7, 2024 and sell it today you would lose (336,146) from holding GS Engineering Construction or give up 15.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. ENERGYMACHINERY KOREA CoLtd
Performance |
| Timeline |
| GS Engineering Const |
| ENERGYMACHINERY KOREA |
GS Engineering and ENERGYMACHINERY KOREA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and ENERGYMACHINERY KOREA
The main advantage of trading using opposite GS Engineering and ENERGYMACHINERY KOREA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA will offset losses from the drop in ENERGYMACHINERY KOREA's long position.| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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