Correlation Between Pureun Mutual and GiantStep
Can any of the company-specific risk be diversified away by investing in both Pureun Mutual and GiantStep 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 Pureun Mutual and GiantStep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pureun Mutual Savings and GiantStep Co, you can compare the effects of market volatilities on Pureun Mutual and GiantStep 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 Pureun Mutual with a short position of GiantStep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pureun Mutual and GiantStep.
Diversification Opportunities for Pureun Mutual and GiantStep
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pureun and GiantStep is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pureun Mutual Savings and GiantStep Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GiantStep and Pureun Mutual 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 Pureun Mutual Savings are associated (or correlated) with GiantStep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GiantStep has no effect on the direction of Pureun Mutual i.e., Pureun Mutual and GiantStep go up and down completely randomly.
Pair Corralation between Pureun Mutual and GiantStep
Assuming the 90 days trading horizon Pureun Mutual Savings is expected to generate 0.12 times more return on investment than GiantStep. However, Pureun Mutual Savings is 8.11 times less risky than GiantStep. It trades about -0.43 of its potential returns per unit of risk. GiantStep Co is currently generating about -0.15 per unit of risk. If you would invest 845,000 in Pureun Mutual Savings on November 4, 2024 and sell it today you would lose (28,000) from holding Pureun Mutual Savings or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pureun Mutual Savings vs. GiantStep Co
Performance |
| Timeline |
| Pureun Mutual Savings |
| GiantStep |
Pureun Mutual and GiantStep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pureun Mutual and GiantStep
The main advantage of trading using opposite Pureun Mutual and GiantStep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pureun Mutual position performs unexpectedly, GiantStep 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 GiantStep will offset losses from the drop in GiantStep's long position.| Pureun Mutual vs. DB Financial Investment | Pureun Mutual vs. Sung Bo Chemicals | Pureun Mutual vs. Shinhan Financial Group | Pureun Mutual vs. KakaoBank Corp |
| GiantStep vs. Golden Bridge Investment | GiantStep vs. Sangsangin Investment Securities | GiantStep vs. Union Materials Corp | GiantStep vs. Daejoo Electronic Materials |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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