Correlation Between GS Engineering and HJ ShipBuilding
Can any of the company-specific risk be diversified away by investing in both GS Engineering and HJ ShipBuilding 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 HJ ShipBuilding 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 HJ ShipBuilding Construction, you can compare the effects of market volatilities on GS Engineering and HJ ShipBuilding 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 HJ ShipBuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and HJ ShipBuilding.
Diversification Opportunities for GS Engineering and HJ ShipBuilding
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 006360 and 097230 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and HJ ShipBuilding Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HJ ShipBuilding Cons 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 HJ ShipBuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HJ ShipBuilding Cons has no effect on the direction of GS Engineering i.e., GS Engineering and HJ ShipBuilding go up and down completely randomly.
Pair Corralation between GS Engineering and HJ ShipBuilding
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 0.49 times more return on investment than HJ ShipBuilding. However, GS Engineering Construction is 2.06 times less risky than HJ ShipBuilding. It trades about 0.17 of its potential returns per unit of risk. HJ ShipBuilding Construction is currently generating about 0.07 per unit of risk. If you would invest 1,726,000 in GS Engineering Construction on November 27, 2024 and sell it today you would earn a total of 119,000 from holding GS Engineering Construction or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. HJ ShipBuilding Construction
Performance |
| Timeline |
| GS Engineering Const |
| HJ ShipBuilding Cons |
GS Engineering and HJ ShipBuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and HJ ShipBuilding
The main advantage of trading using opposite GS Engineering and HJ ShipBuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, HJ ShipBuilding 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 HJ ShipBuilding will offset losses from the drop in HJ ShipBuilding's long position.| GS Engineering vs. Korean Reinsurance Co | GS Engineering vs. Daechang Steel Co | GS Engineering vs. DataSolution | GS Engineering vs. Samsung Life Insurance |
| HJ ShipBuilding vs. Cube Entertainment | HJ ShipBuilding vs. Pan Entertainment Co | HJ ShipBuilding vs. SM Entertainment Co | HJ ShipBuilding vs. JYP Entertainment Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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