Correlation Between Eagon Industrial and Chinyang Hold
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial and Chinyang Hold 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 Eagon Industrial and Chinyang Hold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and Chinyang Hold, you can compare the effects of market volatilities on Eagon Industrial and Chinyang Hold 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 Eagon Industrial with a short position of Chinyang Hold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Chinyang Hold.
Diversification Opportunities for Eagon Industrial and Chinyang Hold
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eagon and Chinyang is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial Co and Chinyang Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinyang Hold and Eagon Industrial 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 Eagon Industrial Co are associated (or correlated) with Chinyang Hold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinyang Hold has no effect on the direction of Eagon Industrial i.e., Eagon Industrial and Chinyang Hold go up and down completely randomly.
Pair Corralation between Eagon Industrial and Chinyang Hold
Assuming the 90 days trading horizon Eagon Industrial Co is expected to under-perform the Chinyang Hold. In addition to that, Eagon Industrial is 2.04 times more volatile than Chinyang Hold. It trades about -0.05 of its total potential returns per unit of risk. Chinyang Hold is currently generating about 0.02 per unit of volatility. If you would invest 298,844 in Chinyang Hold on September 4, 2024 and sell it today you would earn a total of 13,656 from holding Chinyang Hold or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. Chinyang Hold
Performance |
| Timeline |
| Eagon Industrial |
| Chinyang Hold |
Eagon Industrial and Chinyang Hold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and Chinyang Hold
The main advantage of trading using opposite Eagon Industrial and Chinyang Hold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial position performs unexpectedly, Chinyang Hold 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 Chinyang Hold will offset losses from the drop in Chinyang Hold's long position.| Eagon Industrial vs. Dongbu Insurance Co | Eagon Industrial vs. BNK Financial Group | Eagon Industrial vs. Korean Reinsurance Co | Eagon Industrial vs. Daewoo Engineering Construction |
| Chinyang Hold vs. Sunny Electronics Corp | Chinyang Hold vs. Sungwoo Electronics Co | Chinyang Hold vs. Grand Korea Leisure | Chinyang Hold vs. Display Tech Co |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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