Correlation Between Korea Petro and MohenzCoLtd
Can any of the company-specific risk be diversified away by investing in both Korea Petro and MohenzCoLtd 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 Korea Petro and MohenzCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Petro Chemical and MohenzCoLtd, you can compare the effects of market volatilities on Korea Petro and MohenzCoLtd 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 Korea Petro with a short position of MohenzCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Petro and MohenzCoLtd.
Diversification Opportunities for Korea Petro and MohenzCoLtd
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and MohenzCoLtd is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Korea Petro Chemical and MohenzCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MohenzCoLtd and Korea Petro 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 Korea Petro Chemical are associated (or correlated) with MohenzCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MohenzCoLtd has no effect on the direction of Korea Petro i.e., Korea Petro and MohenzCoLtd go up and down completely randomly.
Pair Corralation between Korea Petro and MohenzCoLtd
Assuming the 90 days trading horizon Korea Petro Chemical is expected to under-perform the MohenzCoLtd. In addition to that, Korea Petro is 1.68 times more volatile than MohenzCoLtd. It trades about -0.27 of its total potential returns per unit of risk. MohenzCoLtd is currently generating about -0.23 per unit of volatility. If you would invest 285,000 in MohenzCoLtd on August 30, 2024 and sell it today you would lose (42,000) from holding MohenzCoLtd or give up 14.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Petro Chemical vs. MohenzCoLtd
Performance |
| Timeline |
| Korea Petro Chemical |
| MohenzCoLtd |
Korea Petro and MohenzCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Petro and MohenzCoLtd
The main advantage of trading using opposite Korea Petro and MohenzCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Petro position performs unexpectedly, MohenzCoLtd 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 MohenzCoLtd will offset losses from the drop in MohenzCoLtd's long position.| Korea Petro vs. POSCO Holdings | Korea Petro vs. Hanwha Solutions | Korea Petro vs. Lotte Chemical Corp | Korea Petro vs. Hyundai Steel |
| MohenzCoLtd vs. POSCO Holdings | MohenzCoLtd vs. Hanwha Solutions | MohenzCoLtd vs. Lotte Chemical Corp | MohenzCoLtd vs. Hyundai Steel |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |