Correlation Between Bosung Power and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Bosung Power and Heungkuk Metaltech 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 Bosung Power and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bosung Power Technology and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Bosung Power and Heungkuk Metaltech 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 Bosung Power with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and Heungkuk Metaltech.
Diversification Opportunities for Bosung Power and Heungkuk Metaltech
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bosung and Heungkuk is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Bosung Power 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 Bosung Power Technology are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Bosung Power i.e., Bosung Power and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Bosung Power and Heungkuk Metaltech
Assuming the 90 days trading horizon Bosung Power Technology is expected to generate 1.85 times more return on investment than Heungkuk Metaltech. However, Bosung Power is 1.85 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.0 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.01 per unit of risk. If you would invest 393,500 in Bosung Power Technology on November 7, 2024 and sell it today you would lose (97,000) from holding Bosung Power Technology or give up 24.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosung Power Technology vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Bosung Power Technology |
| Heungkuk Metaltech CoLtd |
Bosung Power and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosung Power and Heungkuk Metaltech
The main advantage of trading using opposite Bosung Power and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosung Power position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Bosung Power vs. ENF Technology Co | Bosung Power vs. Cuckoo Homesys Co | Bosung Power vs. Hanjin Transportation Co | Bosung Power vs. Polaris Office Corp |
| Heungkuk Metaltech vs. Finebesteel | Heungkuk Metaltech vs. Dongbang Transport Logistics | Heungkuk Metaltech vs. Display Tech Co | Heungkuk Metaltech vs. Sangsin Energy Display |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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